Technology-driven third party validation important: Sebi chief

Madhabi Puri Buch, Chairperson, Securities and Exchange Board of India on Wednesday said that technology-driven third party validation was important in order to evade frauds in the capital markets.

This comes as the regulator witnessed a significant rise in the number of corporate frauds across the country. Buch was addressing Audit Week Celebrations by Indian Audit and Accounts Department in Mumbai.

Buch while speaking on third-party validation in the processing of audit said that “The only way to ensure a true and fair picture of everything we present, is through third party validation. “SEBI’s thrust on third party validation is driven by the commitment to ensure true and fair picture of whatever is presented in the markets”.

Adding that there are more 20 websites in the country which auditors can use to validate the claim of the auditee. “While technology is being used as a tool by fraudsters, we can use the same technology to evade fraud. Auditors can use tools like GSTN portal, bank websites etc. for doing a third-party validation.”, the Sebi chief said.

Moreover, stressing on the ‘Role of transparency and accountability in governance’, she said that if there is transparency in the market, then market forces themselves act in an efficient way and ensure there is no wrong-doing in the market.

“As a regulator, SEBI is responsible for a true and fair picture of an entire market, this is why we insist on transparency. The foundation of an efficient market is that there is no information dissymmetry.”, Buch said. Further, pointing at role of auditors, the SEBI Chairperson said as a business leader or as a leader of an institution, our accountability is to ensure that there are no errors of omission and no errors of commission. She added that auditors help us in achieving the same and ensure our peace of mind. With reference to corporate governance she said that “Conscience is the guiding principle. “Ask yourself whether I will be able to defend this when this is published in newspapers the next day.”.