Member Since: 29th Nov 2012
24th Oct 2019
As Mr. Scott says "the 2018 heatwave disrupted trading to such an extent it caused a damaging decline in profitability, undermining assumptions in the business plan." What sort of forecasting they had? Where was the Internal control to monitor and modify the budget immediately? When they cannot run the company properly , they should be made to return their remuneration excepting the amount required for subsistence level wages and denied all other benefits.
The auditors should also be asked to repay their remuneration to the company. In India, PWC was ordered by the Security Board of India to return their fees to the client for their faulty audit of US listed Satyam Computers.
Unless these strong measures are undertaken, no reform could produce the desired result.
Further when a company's turnover crosses certain limit, say,500 million, they should be ordered to be audited by three or more audit firms, not necessarily BIG 4s, jointly without any increase in the total audit fees, so that each auditor's area of audit is agreed to initially.
Valuation of goodwill may affect the presentation of the final accounts but does not affect the cash flow which is the problem for getting into insolvency.
Instead of merely certify going concern the auditors should be asked certify that the cash flow position is satisfactory to pay the debts and there are no outstanding dues to creditors of more than 90 days pending at the date of balance sheet.
2nd Jul 2019
Delay perhaps because one of the big Four was involved. It took more than 7 years in India for ICAI disciplinary committee to punish PWC in Satyam Fraud case.(That too without any monetary punishment) Whereas PCAOB punished them within 2 years with a fine of $100,000 and excluding the PWC India from certifying accounts according to FASB standarsds for 2 years.
4th Nov 2016
This is a common phenomenon throughout the world. Rich people can afford to evade tax by hobnobbing with politicians.
Mr. Mallya, a liquor baron of India is in UK or somewhere out of the reach of supreme court of India.
In another case, a straight forward tax officer caught tax evasion of another liquor baron in India by sale and leaseback of assets. When the tax officer wanted to take action, he was immediately transferred to some other post. That is how tax evasion is carried out universally in all countries owing to human failure/frailty towards rich persons by the government mach
9th Dec 2015
To become an ambassador, one must be a close friend of the Prime Minister or the External Affairs minster or a close friend of them, to whom the PM or EAM listens or have a concern, as can be seen from the past history of more than 500 years.
Similarly when a person starts practice, if he has the good luck to be supported by.a growing business group with vision for expansion, he will have the intensity to learn, study and understand things in order to suitably advise the group. Once he is successful with that group, other businessmen also approach voluntarily to seek his advice and he can grow his business demanding better fees and employing better people. That is how the practice grows as can be seen from the past history of development of accounting practice since the last 150 years.
But if an individual starts his practice serving the local individuals, small business men and taxpayers, who do not have much to offer challenges, one cannot expect him to learn new things, but his attending professional conference may be useful to him but to a limited extent, since he may not have the time and opportunity to apply most of the things, like corporate governance, Accounting standards relating to e.g. employee options, classification of liabilities, since he may not be auditing big companies.
These conferences will be more useful to middle level firms and employees of the companies , who may not have the time and inclination to read professional magazines regularly to update themselves and the conferences are easy way to learn something and the opportunity to discuss with old friends whom they meet at the conference.
The bigger firms who can afford to employ professionals to make study and prepare papers for in house circulation for the other people to know and they do not need the conference to know freshly anything. But they attend and do useful service,by demonstrating their specialized knowledge on their chosen subjects, at least to those middle and small firms , who may, if at all, have similar problems like the the problems outlined by them and get an idea as to how to overcome the problem.
In practice, not only profession knowledge matters, but more of contacts who recognize that knowledge useful to them and to their friends.
3rd Jun 2014
Ausit by Big4s
Why no punishment for the indulgent, callous audit firms? The partners in the firm in charge of audit misconducted should be suspended from 1 year to 5 years from membership of the professional body and audit certificate depending on the degree of misconduct and a fine imposed on the basis of the audit fees received.
PCAOB punished PWC group companies of India $1,500,000 for shoddy audit of Satyam Software and absence of proper quality control in force and suspended the partners for six months from certifying any accounts under USGAAP for listed companies in USA, in 2010.
This means that the regulatory authorities in the other countries do not have enough teeth to grind against big4s.
31st May 2014
Audit of Banks
The best solution is to appoint joint auditors of four five middle tier firms to do the audits and different audit firms to audit the branches. In the case of big banks, rotate the auditors under the supervision of BOE, every three or five years.
This system goes smoothly in India. The big 4 does not agree for joint audits and so they are on the black list for audit of banks in India and because they bungled the audits of two private banks, which declared almost bankruptcy about more than five years ago..
The audit of the State bank of India, which is one of biggest global banks is audited jointly by middle tier firms and also other public banks are also audited by the auditors empanelled by the Reserve Bank of India and graded according to the number of fellow partners and the number of years of experience and the banks choose from the list three to five central statutory auditors and the local lesser graded auditors to audit the local branches of these various banks,thus saving on travelling expenses and also getting the audited accounts approved by the Board of the respective banks by May end of each year(Financial year closes uniformly on 31st march,). the fees are fixed for each branches according to the level of the advances of each branch as notified by the Reserve Bank of India and also for the central level auditors.The branch auditors complete the audit by 10th of April and the statements are sent to the Regional/central offices and the consolidation and over all audit of the bank after considering the branch returns by the central auditors,the audited accounts are ready by second week of May and the audit is completed.
The State Bank of India has developed its software to classify the bad loans on the basis of the Information sent by each branch and the branch auditor has to report if any item has been omitted to be taken up by the software.due to any reason and report the same. So the auditor cannot omit any bad loans and the provisions to be made for the same. Already criteria have been established by the Reserve Bank of India for classification of bad loans for all the banks and accordingly they have to make LOSS provision.
Why the banks in England have not developed the software to detect the bad loans and report them every month?. If the auditors do not follow the bad loans list and verify the same and make the right provision,they could be easily caught up.
THE LESSON IS THAT BIG BANKS(THAT CANNOT FAIL) SHOULD HAVE JOINT AUDITORS AND DIFFUSED AUDITORS FOR VARIOUS BRANCHES. THEN THIS MALAISE COULD BE CONTROLLED AND COMPETITION WILL PUT OUT MORE EFFICIENT AUDITORS WITHOUT COMPLACENCY.
22nd Apr 2014
When avariciousness grows wild and morality goes down, what the Hell we talk about?
14th Apr 2014
How a bank account could be opened without observing KYC norms? Were the bank officials also in collusion?
20th Apr 2013
CUT and Paste
The more easier way is to select the formula from the Formula Bar and cut and paste it any where. The formula remains the same, even without dollar sign.
14th Mar 2013
The best way out to require audit by joint auditors, the nubmer of joint auditors being decided depending on the size of capital or turnover or gegraphical access so that branch audits are always done bya different auditor thatn the mainstatutoryauditors. This will creat more widespread exposure to all sizes of firms foir audit expericence and to grow intheir exoertise. In India for all public sector companies, the auditor general suggests the auditor for units of each area and mnostly local audit firms so that expenses on travel and other outgos are reduced. In the case of public sector banks, threeto five audit firms are appointed as statutory adutors and the aduits of branachs are alllotted to the local auditor firs os certain size depening on the size of the advances of the branches. The statutory auditors divided maong themselves the varius areas of audit and discussmaong themseles and the management collectively onaudit points arising out ofthe audit before finalised the aduit and the audit report with various notes and qualifications are issued as reqruied under the regulations of the central bank. It is working well for th epast more than fifty years now. Whynot adot the same in UK also?