Yesterday we witnessed a landmark event for the accounting and auditing profession in India. We are greatly concerned because it involves Chartered Accountants
SEBI has found Price Waterhouse guilty in the INR 7,136 crores Satyam scam. The market regulator on Wednesday barred its network entities from issuing audit certificates to any listed company in India for two years and ordered disgorgement of over Rs 13 crore wrongful gains from the audit major and its two erstwhile partners, S Gopalakrishnan and Srinivas Talluri—who had certified Satyam’s audit reports in 2000-2008. Read the 108 page order here https://goo.gl/pjL6aG
While we are still a long way from the eventual outcome, the sequence of actions proves beyond a doubt that little oversights can lead to disasters of epic proportions. Whether it was a lapse due to fraud, error or poor quality control, the firm has lost immeasurably in terms of brand reputation
In the year 2009, the two partners arrested then had told the CID sleuths that they approved the accounts of Satyam because of Ramalinga Raju’s ‘towering presence’ and did so without ever questioning him https://goo.gl/2ytTcy . A
s we often tend to get lost in the bird’s eye view and the helicopter views, these are stories that remind us of the importance of the having the basics in place and sticking to them fastidiously.
Remember the proverbial ” For Want of a Nail” by Benjamin Franklin’s “Poor Richards Almanac”.
Here it was “For Want of Ethics” was at the forefront of the Big 5 getting reduced to Big 4, post Arthur Andersen/Enron and now Big 3 for listed companies in India, at least for the next 2 years, with this
Have you been signing on the dotted lines without the requisite level of due diligence
Who knows you would be riding a tiger, not knowing how to get off without being eaten