On June 13, 2025, the Securities and Exchange Board of India (SEBI) issued a clarification regarding its recent overhaul of the forensic auditor panel for listed companies. This move has sparked discussions about SEBI’s evolving approach to corporate governance and regulatory oversight.
The Overhaul: A Strategic Streamlining
In April 2025, SEBI reduced its panel of forensic auditors from 20 in 2022 to 9 in 2025. Notably, major firms like Ernst & Young, KPMG, and Grant Thornton were excluded, with Deloitte being the sole Big Four firm retained. The selection criteria emphasized frequent past engagements and a strong track record of timely audit completion. This strategic move aimed to streamline the panel, focusing on firms with proven capabilities and efficiency.
The Clarification: Addressing Industry Concerns
Following industry feedback, SEBI issued a clarification on June 13, 2025, providing further insights into its decision-making process. The clarification emphasized that the overhaul was not a reflection of the excluded firms’ competencies but rather a strategic decision to manage the panel more effectively. SEBI acknowledged the concerns raised by stakeholders and assured that the selection process was transparent and based on objective criteria.
Implications for Market Participants
The revised panel is expected to enhance the efficiency and effectiveness of forensic audits in the securities market. By focusing on firms with a strong track record and specialized expertise, SEBI aims to ensure that forensic audits are conducted thoroughly and promptly, thereby strengthening investor confidence.
Conclusion: A Step Towards Enhanced Oversight
SEBI’s decision to overhaul its forensic auditor panel reflects a proactive approach to corporate governance. While the exclusion of prominent firms has raised questions, the clarification provided on June 13, 2025, underscores SEBI’s commitment to transparency and effective regulation. As the financial landscape continues to evolve, such strategic decisions are crucial in maintaining the integrity and resilience of India’s securities market.
