Hi All,
The reason auditors are there so as to make sure that the corporates are not cooking their books and our money is safe with them. But what happened today raises a big question on this preposition.... This is absloutely not accepted that the auditors are unaware of any such thing.... When Enron tumbled its auditor Aurthur Anderson was also shown d same door... Y not this with PWC.... Moreover PWC already has a grey track record in India.... It was banned from RBI from doing any bank audits after the bankruptcy file by Global Trust Bank, the banned which was just lifted last year.... (FYI: http://www.business-standard.com/india/storypage.php?autono=316917)
So Why not bann the BIG AUDITOR from auditing any Indian company and making history not repeating it self...
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I think this fiasco will open can of worms in Indain industry.As damodaran right said this is not the first and will not be the last fraudulent case in Indian coporate history.Moreover,how to invigilate good corporate governance can be next topic of discussion
ReplyDeletesatyam might just be the tip of the iceberg.. with just 8% holding if raju could manipulate the books of accounts so much.. think of co.s where promoters have more than 50% shareholding...
ReplyDeleteHey Piyush... here you are mistaking... Raju did it because his holdings were low.. and FYI not 8 but as low as 3 (Check today's ET)... so that even if stock falls he is not hampered.... company's with higher promoter holdings is less risky since fall in stock price would hamper them more than any accounting fraud earned money......
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