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Friday, August 30, 2013

In defense of Chartered Accountants

In defense of Chartered Accountants

My reply to the report in Today’s ET article on page 14. Article link given at the end of this write up. Article title

Companies Bill, 2012: Will auditors become a vanishing breed?


I read the article half an hour back and I felt that I must write this.

I am neither a Chartered Accountant nor from a family of Chartered Accountants nor a minister because my father happened to be a friend of Nehru family

It is pathetic that persons of the ilk of Sachin  Pilots are allowed to make sweeping remarks on existing administrative systems.

Well, all administrative systems require modifications and minor changes to suit to the changing scenario, or, to use a more acceptable modern jargon, to the paradigm shifts in business trends. Indeed these trends are changing at a greater speed than the shape of clouds.

However all must know that proper measurement and evaluation are the sine qua non of scientific approach to any activity. In a macro activity involving trade or corporate affairs with too many wings/departments/too many players/ too many decision making authorities etc it becomes imperative to monitor and check whether those fundamental scientific aspects namely measurement and evaluation are properly followed and wherever necessary to suggest change of course by the authorities who are technically qualified to do that, namely auditors.

The problem is this poor kid like many other kids in Congress ministers’ families who have been placed on high pedestal without any proper technical or academic qualification and devoid of any worthy experience are prone to such loose talks and statements. When providence pours the three Ps, namely power, position and pelf without any logic or effort on your part you cannot be expected to and you need not perceive things in the proper perspective because those three Ps indicated earlier compensate the necessity for perception, performance and proper functioning based on that.

So they cannot be expected to understand the role and significance of any decent, scientifically developed administrative procedures. They have grown with scant respect for any systems or systematic approaches as they have been spurned into a career of success surrounded by sycophants and servile bureaucrats.

It is also a sad fact that due to the wrong methods, bad practices of a few auditors there is wrong perception among the many half baked academicians/technocrats/scientists etc  who think that the profession of auditors  is safe guarded by the terminology ‘that the auditor has done his work to the best of his knowledge based on or as per the statements and documents shown to him’ and they also feel the profession of auditors is confined to dressing up balance sheets, educating the business man how to cover  up to avoid taxes, showing him the escape routes of non compliance etc. This is the handy work of some auditors and the wrong perception of the half baked public .The reality is different. For that matter some judges take money and decide the cases, there is even a very old saying which says “ a good lawyer knows the law and a great lawyer knows the judge”. Does that mean we do not need lawyers or judges?

There were many and there are a few politicians who have come up by doing real  social service, sound sense of economic development and through track record of able governance but there are some who have become even ministers by other means. Does that mean that we do not need ministers concerned with economic development to govern?

Entrepreneurial skills , management principles etc are creative enterprises and   they will always grow exponentially as any creative activity must, but then, any highly creative activity which impacts on the social life of human beings , likely to create irrational social imbalances, likely to harm the physical well being of human beings , likely to affect [corrupt] the mental/intellectual faculties of human beings etc have to be bridled and controlled by some logical and universally accepted control and monitoring mechanism. This is where professions like audit play a significant part.

Let me quote her two examples which are fresh in the memory of people living in Tamil Nadu as these two activities took  place within the last ten days.

A week back you might have read in the newspapers one chap in Tiruvallur created a history of sorts by operating a mobile Alcohol shop by carrying some forty bottles of liquor in his two wheeler and selling it to workers in their work place relieving them the trouble of going to liquor shops, he was arrested and is behind bars. Is that legally wrong, if yes, how? All that he did was doing door delivery for a fee. Imagine if one day a Flipkart or Ebay starts selling all types of liquor then this person would be the trend setter. Or probably seeing the revenue potential in it the government itself may start setting up alcohol vending machines everywhere. Why not?

Similarly another chap showed his entrepreneurial skills by picking up uncared for mentally ill patients loitering in the roads and made  them beg and ran a business wherein he earned somewhere around 1.5 lakhs per month. [He could not recruit Digvijay Singh because he was fortunately picked by  congress as its spokesperson].

People like Sachin pilots have perhaps been made to foul mouth such versions because the current Unscrupulous Political Affiliation is being troubled by CAG to such an extent that in Delhi the popular joke is Audit is the oldest profession because ‘Adam turned a leaf and made an entry’ as ministry after ministry is getting screwed up by CAG.

The media on its part gleefully uses both the magnifying glass and micro scope and projects the slides whenever it involves any other sector/profession whereas you just sniff to them about FDI in media, investigation into their misdeeds then  they will recoil like snail to pepper.

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