'A'Satya Story

Wednesday, January 7, 2009

Ok. I know that its not auspicious to start an year with bad news, but since all am hearing these days is bad news, i am left with no other options.

We have heard of Accounting Frauds happening in US or Europe (Who can forget legends like Enron and Worldcom??). Now Indiaalso has attained self reliance in this matter, thank to Satyam. Satyam
Computers is/was the 4th Biggest IT Company in India (or so i heard).Today, Its chairman Ramalinga Raju, in a letter addressed to Board of Directors, SEBI Chairman and Stock Exchanges confessed Accounting Frauds to the tune of nearly Rs 7100 Crores, may be India's biggest accounting fraud till date!!

The next question that arises is :How did he do it? Well, Mr Raju explains that too. Non existent bank
balances and accrued interest, Overstated debtors balances, understated liabilities etc.. He hasnt disclosed further details as to how he actually did those things without troubling the auditors and other government agencies who are supposed to verify the statements.

Now something about auditors: I know that not all the CAs are 'alphabets of trust'. But i was hoping that those who carry out audit of such big entities will be impartial and will follow the auditing standards. How wrong i was!! Corruption has stained the proffession that has so much responsibility to the general public. 53000 employees of Satyam and countless others may loose jobs, thousands of shareholders will loose their investments, all because those who are supposed to find out frauds didnt and may be even worse, aided in committing the fraud. I hope ICAI will take strict action against those who have violated the 'trust' that CAs have built over the years.

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