Archive for September 24, 2014

admin | September 24, 2014
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Audit is not the Solution

Currently , after a long time, we are witnessing some debates and discussions on “Audits”.. thanks to some startling revelations by ex CAG, Mr . Vinod Rai. Reading his book, indeed was a pleasure for a professional auditor like me . The book set my thoughts rolling

There are broadly two types of “Wrong Doings” which are revealed

1… That the Revenues have been under recovered , which can lead to huge Undue Enrichment of Private sector entities, and
2… That there are Excessive, unjustifiable expenses, leading to huge Undue Enrichment of Individuals/ corporates

now , here is a “Heads I Win and Tails You Lose ” type of situation.

If you plug the loopholes in revenue collection, than the funds get exposed to undue spending from the Government exchequer ! There seems to be a game of “Catch Me If You Can”, going on against the Auditors , not only in Public Sector , but also in the Private Sector. This is really demoralizing and frustrating in deed.

so what do we gain ? We need to plug all loopholes . This takes us to the basic moral fabric of the society .Unless that is strengthened, even thousands of Vinod Rais will get frustrated .

Category: General, Uncategorized |
admin | September 22, 2014
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PERFORMANCE AUDIT …. WHY NOT FOR LISTED COMPANIES ?

I was reading the recent book ” not just an Accountant ” by Vinod Rai .
An excellent book, worth a read for all auditors, in particular . It narrates the plight and complexities of the task of an auditor very lucidly.

one thing which I clearly noticed was that the real complex findings of the CAG emerged out of the Performance Audit that the CAG is called upon to perform as an auditor . The reason is simple. He is supposed to audit the Revenue and expenses for and on behalf of the people of India. It is the matter related to spending public funds and use of public resources.Hence he is called upon to look at the propriety aspect of the expenditure and conduct performance audit.Quite rightly so .

I am sure you will agree that even the large and listed companies, to a huge extent use public funds and resources. Why should we shy away from getting the Propriety aspect of the audit and performance audits when it comes to regulating audit requirements of such companies . Who should conduct such audit, what should be the Terms of Referance, periodicity and circulation of such reports etc can be brought out for debate and serious mind needs to be be applied at relevant level sonner than later .

Category: Finances, General, Political, Uncategorized |
admin | September 4, 2014
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“Financial Untouchability”

Cudos to the Hon PM Of India for coining a word ” Financial Untouchability” for the ailment that exists in the banking sector, all over. There has certainly been a tendency on part of the banks to entertain large clients. Large accounts take relatively lesser time and provide a healthy financial rewards, so to say. This tendency is thus quite natural but this should not deny an opportunity to others who are, albeit small and marginal, but deserving nonetheless . Excessive time to be spent in bringing the BPL citizens into the main banking channel , fear of NPSs in advancing credits to MSME and Agriculture sector, inadequacy of reliable information flow from these sectors etc become unbearable for the banks who are struggling to attain a decent bottom line . But avoiding these sections of society is not in the interest of the economy and society . However it needs to be noted that just opening of new accounts and awarding some financial incentives will not solve the larger problem. For addressing the issue the bankers will have to be motivated and adequate control systems will have to be placed in line, in order to ensure that the desired results that the PM and all of us are looking forward to are attained.

Category: General |
admin | September 3, 2014
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IPOs…..People are about to welcome you !!

The recent upswing in the sentiments has resulted into a rapid rise in the share market index . this is a welcome state to be in, for a longer time . But the trend is more or less continuous since nearly four months or more .
the analysts will agree that the PE ratios are rising beyond or near dizzy limits. Even at this stage the good sentiments are showing a growing trend ( thanks to good monsoon, some solution to coal block blockages and the initiatives of the new NDA Government ) . The investors will soon realise the high PE implications and will be a bit worried about the future. In order to keep their appetite duly satisfied, new issues of convertible debentures, equity shares or large Private equity deals will be sought after.

Category: Finances |