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Q.

Corporate affairs minister Khurshid invites global auditors KPMG, Deloitte, Earnest Young, and PW Coopers etc to set up shops in India. Will it improve the auditing standards in India? Mind PWC was the auditors to Satyam.

Asked by Good Citizen, 08 Jun '10 12:55 pm
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Answers (4)

 
1.

I think you have the Satam fraud in your mind while framing this question. Accounting scams are ofcourse always the doing of insiders. And when the fraud is at the very top, internal controls are easily overriden. Only the external checks in the form of independent directors, and external auditors can provide real assurance to to shareholders and investors. The critical role is that of the external auditors..Price Waterhouse Bangalore in the cas od Satyam and Arthur Anderson for Enron. The accounting firm Arthur Anderson was accused of going along with accounting fraud perpetrated by the company's top executives who sought to hide debt and expenses in highly complicated off balance sheet partnerships to present a rosy picture of the finances and boost share values.. One lesson from the failure of the watchdogs at Satyam is that continuing with procedures that depend heavily on trust and good faith rather than putting matters beyond any doubt by verification will leave the door open ...more
Answered by thampy chacko, 08 Jun '10 02:21 pm

 
  
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2.

I came across news reports sometime back that all of the above said auditing firms are already there in India working as consultants because as of now there are no rules for foreign auditing firms to set up shops in India. Probably GOI is trying to formalize it by bringing in suitable legislations in Parliament. Foreign MNC auditing firms would of course bring in their expertise and technology. That itself will be of little help unless India also has similar accounting standards and legislations governing them. We all know that Indian accounting standards and legislations are not up to the International Accounting standards & Acts like The SarbanesOxley Act of 2002. The bill was enacted as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of affected companies collapsed, shook public confidence in t ...more
Answered by Tony Fernandez, 08 Jun '10 01:31 pm

 
  
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3.

Definitely this will give a exposuere of international system of accountancy. as foras satyam or other frauds or concern high standard accountancy alone cant do very much because auditor is actually auditing the documents he will not be able to audit once bad intension are fraudlent character of the firm by only watching certain fabricated papers. Secondly fraud and misappropriation can be controlled but can not be eliminated bt any process otherwise Maryl linch,goldman sechs and other international financail institutions had not be collapse
Answered by sushil trivedi, 08 Jun '10 01:07 pm

 
  
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4.

I think SATYAM was also having some foreign firm but see the result ultimately.
Answered by UNNIKRISHNA RAMAN, 08 Jun '10 01:00 pm

 
  
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