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1/09/2009

Satyam, the truth is out

The doctoring of corporate accounts has appeared to be a common practice among big corporations across the globe, from America to Europe and Asia. I could understand how it could be done over the years without being discovered in backward countries without the due process of auditing. But it should not be whether renowned international auditors are engaged to do the job. Under the western model of corporate governance, the auditors play a very big role in checking the accounts of public listed organisations, and are handsomely rewarded for this task. Apparently due diligence in this role is much to be desired given the prevalence of this malpractice. In fact it is a text book fraud that all auditors must know and look out for. This is the first time that the regulators are thinking of looking at the role of the auditors to see if they are culpable to the misdeeds, whether through negligence or even being accomplice to the crime. More auditors must be hanged to give notice to the importance of their role in preventing corporate frauds. But I still remember that it was said some where that it was not their role to discover corporate frauds. So their role must be simply going through the motion of checking and submit a report to confirm checks have been carried out, without any responsibility. Other than the independent directors, the next level and most effective defence against corporate frauds must be the auditors. And they are paid to do the job. They are professionals.

9 comments:

Capt's Longhouse said...

The biggest fraud is with the Federal Reserve. This is a private organization created to deceive the American public and the World at large.They loan out money that they don't have and earn interest from it. Now the whole world suffers !.

redbean said...

hi capt's longhouse,

the Fed is surviving on the biggest ponzi scheme that modern history has yet to reveal. it will collapse as a matter of time. just like what satyam's boss was saying. they were patching the gaps and hoping that the gaps can be closed somehow with a slew of luck. but the gaps got wider.

this is typical of all ponzi schemes.

Anonymous said...

What can we say. They just created money out of thin air and exchange them for goods produced through blood and sweat of other countries. Are people wiser now? I doubt.

redbean said...

no worry. it will catch up with them. in fact it has.

Anonymous said...

The Fed, US govt, fat cats, auditors and rating agencies - same specie, eating at the same trough and are the cause of all this financial mess.

Anonymous said...

The only thing which governments and central banks are competent at doing is to print money - when times are good, print. When times are bad, print. When in doubt, print.

Print print print!

I propose that every citizen should be entitled to a dollar counterfeiting machine - at least the dollar bills will be more evenly distributed.

Anonymous said...

Are all auditors and auditing firms themselves reliable?

patriot

redbean said...

in today's media, the auditors are confirming that cooking of accounts is prevalent and in our midst too. and the possibility of a bigger satyam happening here is real.

Anonymous said...

The unstoppable Asia (to quote one authority Professor T ,Koh)just do not laugh as yet.

Uncle Sam may well be heading for collapse,but pl remember how the tiger nations came about,and one promising UP COMING SUPER POWER waiting in the wing.

Yes,Uncle Sam spend money like no tomorrow,but w/o greedy Uncle Sam buying,would they be any Asian tiger at all,I doubt very much.

That is the real trouble with the world,Asians slave in the world factory,and also give all the money to the only buyer,say,pl buy fr me,use my money,Uncle Sam.

How to solve?new president Obama knows this,he tried to raise taxes on petrol,but would it fly,definitely not.

And that is 14,000 Thousand barrels per day and they borrow fr Saudi to foot this import bill,close to US$600-900 billions a year.

The strong point about Uncle Sam apart fr spending like no tomorrow,is their innovations and cretivity,they adapt fast and well,so it is not all lost yet.

Sinner-Spore