Dewang Mehta, the head of the IT industry body NASSCOM for a good decade from 1991 to 2001, used to narrate a lovely anecdote that needs recounting now that the Satyam fraud has hit the false-roofing.
An Indian IT company wants to appoint an auditor to look at its books. It floats a global tender. Since it is an IT company with global standards, the bar is high, very high. And since it is an IT company with global standards, only the best and brightest are expected to walk away with the contract.
Over a dozen applications are received from around the world by the company. The applications are evaulated and a short list is prepared. There are three companies left in the race to bag the prestigious contract: A European company, an American company, and an Indian company.
On D-day, the chairman of the Indian IT company, known for his extremely humble beginnings, himself decides to be present as the interview panel fires questions at them.
The European auditors are called in first for the interview.
Since the chairman of the company, known for his extremely humble beginnings, is around, the interview panel decides to ask a very simple question to break the ice: “How much is two plus two?”
The Europeans are aghast. They pick up their folders and walk out in a huff, unable to stand the insult to their intelligence.
Next, the American auditors walk in. Again the same question: “How much is two plus two?”
The Americans boot up their laptops, open their spread sheets, work the numbers, and arrive at their answer to show proficient they are with modern technology.
Finally, the Indian auditors walk in.
“How much is two plus two?” asks the chairman.
The Indian auditors gesture the chairman to step out of the interview room for a while.
Outside, they ask him: “How much would you like it to be, Sir?”
GOOD ONE !!
Evocative. Satirical. Brilliant.
ha ha ha gr8 :-)
Thats a gud one.
European and American auditors will build a model using the latest supercomputer built by a crack team of “Noble” prize winning economists and will come up with a complex derivative scheme for their clients to sell (which might also win a Noble prize, if it goes on long enough), to learn the “true market” value of “2+2” which might run from 0 to bazillion, which will inevitably collapse in time when it dawns on the holders of the complex derivatives that 2+2 is 4.
The Indian auditor saves time and money by just asking his client what he wants it to be and also saves the would-be holder of the complex derivatives.
PWC is not an Indian based auditing firm.
I agree with Vishwas Krishna … if u see all the accounting scandals all across the world, American/European accounting firms have been involved.
Starting from Enron, WorldCom, Global Crossing every one of them had the famed 4 (or is it 6?) involved.
Satyam may have been better off if they had retained an Indian accounting firm instead of blindly going in for the foreign ones.
How would Satyam have been better off any which way? They were the main fraudsters – and PWC went along for the fee.
An Indian accounting firm would have done the same or they would have had to stay away from the fraud Satyam. And anyway many of the PWC auditors who looked into the Satyam account would be Indians.
With the Satyam scandal, everyone should sit up and look into the various auditing firms and their way of working. As for PwC, all the firms they have audited should be under the scanner as, this is not the first time they have been in the news for bungling/fudging of accounts. Either they are plain incompetent or plain corrupt. Start from the top, scrutinise all the partners based in India.
If the ICAI cannot take action against the firm itself (PwC) the investors and other affected people should.
Enough of corruption and enough of terrorism!
All the commenters are missing one thing. If Dewang Mehta of NASSCOM shared it 10 years ago, it’s a common business practice in most Indian companies-including the IT companies. Maybe the top 3 dont…but who the hell really knows! Can ANYONE Be Trusted????
raelly a catchy article,But in the case of satyam all the fraud has done by ramlingaraju and other top officials he was lost in his sons blind love and started cheating its investors and share holders in this scam nobbody can be trusted aclean and clear investigation should be held to know the hidden fcts and truts but what about the huge employees about their future in the time reccesion god blees allof them with good future
ICAI seems to be unwilling to take action against PwC. Who are they shielding and why?
RBI has rightly advised Banks not to use the services of PWC and there is a need for Income Tax authorities to re check all accounts audited by PWC in the last few years.
There should be a CBI inquiry on the operations of PWC in India.
PWC deserves immediate suspension from its activities in India.The investors and shareholders need to get together and form a forum and teach PwC a lesson.
PwC has charged exorbitant fees and the top officials are enjoying a luxurious lifestyle which they just don’t deserve.