The SEBI building in Mumbai. (Source: BloombergQuint)
With no guardrails around the mandatory disclosure on forensic audits, the regulation will defeat its own purpose of improving transparency for market participants: it will increase stock price volatility, create opportunities for price manipulation, and add noise to the market. SEBI needs to define the contours of its disclosure requirements, else boards will become reticent in instituting forensic audits, which is detrimental to th...