V Pattabhi Ram
When I read Satyam Chairman’s letter to his Board yesterday at about 1130 am it took my breath away.
A balance sheet that has about Rs 7,000 crore in fictitious assets; And that too from one of India’s bluest of blue chips.
An iconic chairman; a star-studded board; the world’s number 1 audit firm the mix couldn’t have been headier. If it can happen here it could happen anywhere is the refrain.
For sure it has shaken everyone’s faith in many things; in corporate entities, in independent directorships, in audits, in regulatory framework.
There is no need to rush in with new legislation. We have enough law to meet this situation. We are an over regulated economy; what we need is implementation of law. We have to see action, quick and fast.
The goose for Satyam is cooked. The company is finished. A service industry is built on clients. Clients need to move out and get spread amongst India’s IT big three
It’s a sad day for India.
It’s proved the adage that if you chase valuations instead of values, if you chase money rather than respectability and if your mantra is overriding greed amidst crony capitalism this is where you will end.
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9 comments:
"It’s proved the adage that if you chase valuations instead of values, if you chase money rather than respectability and if your mantra is overriding greed amidst crony capitalism this is where you will end."
True Sir..... I have been visiting this blog, to check out what message you have in stock for us, ever since I got to know that Raju was struggling to get off his tiger, without being eaten.
I pray that the above quoted lines, keep ringing in the Young Indian minds,so that they live a life, a life governed by the Highest Standards of Integrity.
The mighty have fallen. –
Not just w.r.t the cos. that have gone down in recent times. First, it was the rating agencies and now it’s the Audit Firms.
Are things like “substance over form” and “integrity” merely in text books?
Or were the duo influenced by the overbearing size of the cos? Sadly now, “might” / "size" is fast losing its identity in the corporate world.
A newspaper, today, carried this interesting msg:
“How the ICAI acts in the next few days could well make or mar the profession of auditors.”
How true!
"We are an over regulated economy; what we need is implementation of law."
and may b better responsible citizen driven by values as u said..
Auditors Auditors Auditors!!!! whichever news channel whichever newspaper we take everyone is blaming the Auditors(as Frauds)and in my view its impossible that inflated bank balance of 7000 crs can be shown without the help of auditors.. i just have no comments to make on this since it directly relates to ICAI but as a student of such a reputed institute if we dont react to it within shortest possilbe time then hell its gonna create a trouble for future CAs as well as make an impression in the mind of people that even "AUDITORS ARE FRAUDS"
The Media needs to frame somebody as the big dark bad man with those moral standards of an eel.
We know seem to be the most potent person in the cross hairs. This will blow over with sathyam going down & PWC coming out even stronger.
People might think of us as fraudesters but at the end of the day they need us. So if u r not Mr. Ghandi grandkid you have no issues
Chill out & enjoy the limelight. As they say any publicity is good .
Cheers enjoy life
Price Waterhouse Achievements
Please take your time to read the following
Punishments and Criticisms
1.Dell, Inc. litigation
On January 31, 2007 PwC was named as a co-defendant in a class action lawsuit filed against Dell, the world's number two PC manufacturer. Taken on behalf of shareholders, the lawsuit alleges that Dell, and its auditors, failed to disclose information about Dell's financial condition.
2.Tyco settlement
In July 2007, PwC agreed to pay $225 million to settle a class-action lawsuit brought by shareholders of Tyco International Ltd over a multibillion-dollar accounting fraud.
3.Satyam case
Recently, PwC showed complicity with the promoters of Satyam, an Indian IT firm listed in NYSE in a 1.5 billion dollar accounting fraud. PwC was the statutory auditor for the firm, whose Chairman admitted to playing with the books in a letter to the company's Board of Directors on January 07, 2009.The scandal has raised serious questions about the role played by PWC as an auditor and the firm is very likely to face a large number of law suits in India and in the US (Satyam was listed in the US as well). This is a turn of events that could threaten the very survival of PwC. Similar charges against Arthur Andersen in the Enron case caused a collapse of that firm.
Other punishments and criticisms
In 2007, India's accounting standards agency ICAI had found partners of PwC guilty of fraudaulant accounting in the now-defunct Global Trust Bank (India). Similar to Satyam, Global Trust Bank was also headquartered at Hyderabad, India. This led to Reserve Bank of India banning PwC from auditing any financial company for over a year. PwC was also associated with the accounting scandal at DSQ software in India. In July 2006, PwC’s Japanese affiliate Chuo Aoyama was handed a two-month ban. Following the Satyam scandal, the Mumbai-based Small Investor Grievances Association (SIGA) has requested the Indian stock market regulator SEBI to ban PwC permanantly and cease its assets in India alleging few more scandals like "Ketan Mehta stock manipulations".
This extract is from a genuine website and the link of it is enclosed
" http://en.wikipedia.org/wiki/Price_Waterhouse "
Sir, do think should such a company of CA's should exist ?
Price Waterhouse Achievements
Please take your time to read the following
Punishments and Criticisms
1.Dell, Inc. litigation
On January 31, 2007 PwC was named as a co-defendant in a class action lawsuit filed against Dell, the world's number two PC manufacturer. Taken on behalf of shareholders, the lawsuit alleges that Dell, and its auditors, failed to disclose information about Dell's financial condition.
2.Tyco settlement
In July 2007, PwC agreed to pay $225 million to settle a class-action lawsuit brought by shareholders of Tyco International Ltd over a multibillion-dollar accounting fraud.
3.Satyam case
Recently, PwC showed complicity with the promoters of Satyam, an Indian IT firm listed in NYSE in a 1.5 billion dollar accounting fraud. PwC was the statutory auditor for the firm, whose Chairman admitted to playing with the books in a letter to the company's Board of Directors on January 07, 2009.The scandal has raised serious questions about the role played by PWC as an auditor and the firm is very likely to face a large number of law suits in India and in the US (Satyam was listed in the US as well). This is a turn of events that could threaten the very survival of PwC. Similar charges against Arthur Andersen in the Enron case caused a collapse of that firm.
Other punishments and criticisms
In 2007, India's accounting standards agency ICAI had found partners of PwC guilty of fraudaulant accounting in the now-defunct Global Trust Bank (India). Similar to Satyam, Global Trust Bank was also headquartered at Hyderabad, India. This led to Reserve Bank of India banning PwC from auditing any financial company for over a year. PwC was also associated with the accounting scandal at DSQ software in India. In July 2006, PwC’s Japanese affiliate Chuo Aoyama was handed a two-month ban. Following the Satyam scandal, the Mumbai-based Small Investor Grievances Association (SIGA) has requested the Indian stock market regulator SEBI to ban PwC permanantly and cease its assets in India alleging few more scandals like "Ketan Mehta stock manipulations".
This extract is from a genuine website and the link of it is enclosed
" http://en.wikipedia.org/wiki/Price_Waterhouse "
Sir, do think should such a company of CA's should exist ?
What I dont understand is how a fraud of this magnitude could just slip through their hands. Sure they have audit evidence but surely this is not the "true and fair" view which was attested by them in the report.
The last para of the blog is brilliant. Amidst all this outburst I expected maybe this blog might follow suit and have some "masala" added in it. But sir has given a very matured outlook regarding the whole issue. Instead of pointing fingers and blaming he has given us a very matured blog to read.
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