According to the recommendations of a panel of the Securities & Exchange Board of India (SEBI), for tighter audits, it should be made obligatory that partners of the audit firms responsible for signing the accounts of a listed company are rotated after every five years.

Though the panel SCODA - SEBI Committee on Disclosures and Accounting Standards - itself noted that the mandatory rotation of audit firms may not be feasible proposition for all companies, it nonetheless said: "A longer association between a particular audit firm and a listed entity may lead to complacency and defeat the true sense of independence of the auditors."

In addition to the rotation of audit firms, the panel also suggested that the chief financial officer should be selected by a company's audit committee, and that the disclosure of the earnings by all reporting companies should be standardized.

Moreover, in its suggestions - largely aimed at preventing Satyam-style accounting scandals - SCODA proposed the publishing of the balance sheets by the companies, whereby half-yearly assets and liabilities' position should be presented; rather than the existing yearly reporting. Such a move will enable investors to effectively gauge the company's solvency position.

SCODA also recommended that companies seek shareholders' approval before appointing an accounting firm; and that the submission of financial results should be streamlined and the period for submission to the stock exchanges should be reduced.