CAs Should Flag Discrepancies 'Immediately' When Auditing SMEs, Says SEBI's Ashwani Bhatia

The Securities and Exchange Board of India's whole-time member Ashwani Bhatia said on Friday that chartered accountants need to be more efficient when auditing companies listed on the SME exchange to ensure better compliance and avoid any major risks in the long run.

"We have seen some challenges. We request you to be extra careful as far as SME IPOs and fundraising are concerned because these small companies will become much, much bigger going forward," he said while addressing a conference at the Institute of Chartered Accountants of India in Mumbai.

Elaborating on the concern, Bhatia said that CAs should flag any "issues" immediately rather than "coming up with surprises" later. "These small companies will become big companies, large-cap companies, in 15–20 years from now. So, if the foundation and practices are right from the beginning and of high quality, it will help the economy and the ecosystem," he added.

Expressing optimism over the growth of the small and medium enterprises platform, Bhatia said that they have raised Rs 6,000 crore in fiscal 2023–24.

Further, he also shared that, according to the latest data from SEBI, funds raised via capital markets have touched Rs 2.1 lakh crore so far in the current fiscal. Corporates have picked up Rs 1.4 lakh crore of funds through primary issuances and Rs 70,000 crore through secondary sales, the data showed.

Funds raised through the primary market, which includes initial public offerings, follow-on public offerings, preferential issues, qualified institutional placements and offers for sales, totalled Rs 10,000 crore in July 2024.

He added that in the next 30–40 years, the mutual fund industry will grow bigger than the banking industry, "considering the compounding of growth in investments seen, especially in the recent 3–4 years, followed by the number of pincodes (geographies) from which investors are tapping, which is high."