Wednesday, January 7, 2009

Surprised are We ... ?

... by the disclosure of a huge accounting fraud at Satyam Computer Services? Well here's a heads up - we shouldn't be!!
The only surprises here are the scale of the fraud and that the perpetrator, having painted himself into a corner, had no choice but to come clean.
Sadly, large parts of Indian business and specifically their CFOs are engaged in a constant effort to overstate revenues and profits to public shareholders and understate the same to tax authorities. The former of course, is more prevalent among publicly traded companies while the latter is rampant among the small businesses that proliferate across the country. There are other abuses too of course but I'm sure there will soon be an illustrative example of those to comment on.
We clearly need to set an example here and take strict legal action against the just resigned Chairman and other guilty persons including auditors etc but the question is whether any companies and businesses will now start looking at themselves and how they do things?
I'm not optimistic but keep my fingers crossed that I never lose hope!

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