Musings for a responsible society

Amidst the dark and grey shades increasingly engulfing, invading and piercing deeper and deeper, let me try to enjoy the little smiles, genuine greens, and the gentle breeze. Oh! Creator! If you don't exist, my vain!
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All she needs is love

Serial fiction inspired from a life queen size

A Letter to Grandma

My dearest Grandma,

       I am extremely sorry to call you Grandma. You never let your grand children or great grand children to address you as ‘Valyammachi’ (Grandma, in Malayalam), because you feared that such an address will be an assertion that you have become an old lady. Fearing your reprimand, all your children, grand children, great grand children, and servants called you Ammachi (mother). And you wanted all your friends, neighbours and relatives to call you by name (Mariamma) unless they were several years younger to you. You used to declare that most of them were elder to you.

     Today, when my daughter insisted on buying a Pears transparent soap during our Sunday shopping at Spar, I suddenly remembered you, because that was your favourite brand for several decades. You had the habit of stocking at least a dozen of them in your wooden almirah.

      I remember your almirah which was customized as per your directions by the carpenter with three locks, fixed equidistant from top to bottom. You always ensured that none of us peeks through while you open it, and in case anyone tried to, you would position your tall hefty body to hide the view. But from what we, youngsters could get a glimpse at different points of time, we almost prepared an inventory of goodies inside it along with their location and shared with your inquisitive children who never dared to come near your almirah.

     They were prohibited from attempting to come near to the almirah from their childhood as you were sure that they would leak the information about the contents to your husband (our grandpa). Most of these Almost everything inside the almirah were ‘undisclosed assets’. And you used to declare that these contents were unaccountable before your husband. You proudly maintained the position that the entire source is from your benevolent brothers and nothing for your husband to take credit of.

         Not only the contents of the almirah, but also its keys were kept safe in your ‘madikuthu’ (the tucking of the cloth at the waist, while wearing it around the waist). We wonder where you hid them whenever you were moved to surgery tables. You might have reposed more trust in those lovely nurses than your own children. While you were on the surgery table, your children must have prayed and worried not only about your health but also about the whereabouts of the bunch of keys. But you always repossessed your keys from undisclosed recipients immediately after each surgery, in the post-operative ward itself.

   You liked medicines, hospital visits and long chats with your favourite physician, Dr Ravichandran. You even faced the surgery table with a smile. When one had to wait patiently for a word to come out of his mouth and lend his ears completely and place it in proximity to his mouth, and watch closely his lip movements to decipher what he says, how could you spend such a long time with him who was known for his irritating silence and expression-free face? Your unstinted faith in the doctor and in Allopathic medicines made you feel better, from rheumatic arthritis to hair loss.

     I used to see you popping several tablets of different colours into your mouth since your early forties. That is my earliest memory which I can recall of me as a nine year old boy, when I used to spend my days in your house, skipping my school due to frequent head aches.

      The reason for my frequent headaches was more of diagnostic in nature than of physiological. One needs a lot of personal experience to detect the existence and intensity of this most favoured disease among children as well as attention seeking adults.

      Not knowing my prize winning talent in Mono Acting practice, my mother used to be very sympathetic towards my plight. When evening ends up in unfinished home work, I start my head ache project first, asking permission to hit my bed earlier than usual. (There was a fixed bed time fixed unilaterally by my mother for me and my sister). While ‘mono acting practise would go on under my red blanket, my mother used to apply ‘Vicks Vapo Rub’ on my forehead. (That was her ‘ottamooli’, something like quick fix, for almost all the pains under the sun) Morning, when my mother and sister send their calls to me, my practiced dialogue flows back.

“Severe headache, amma..Can’t open my eyes”. 
     Finally, to my sister’s utter disappointment, my mother would declare, “Okay, let him stay in Valyammachi’s house”
    Winning the game, I would get up and quickly pack my small bag with my favourite books. My mother would bring me and my bag to your house which was a kilometre away. Explaining my severe headache condition, mother would hand me over to you. You would check if I have fever by placing your right palm on my forehead. I would act a tired look to convince both of you the gravity of my head ache. Both, you and mother were scared of that severe head ache as only both of you know how my Chachan (Dad) suffered before leaving us for ever!

     While my mother quickly had a bite of tapioca and chilly chutney, you placed a big spoonful of gooseberry pickle which you had prepared, for her to share it with her friends at school.

     As my mother departs to school, I used to come back to my true self. I enjoyed being alone in the house, most of the time I spent on day dreaming. Imaginations galore: becoming a writer, a priest, a saint, a bus conductor, bus owner, a singer, and many more. But your long conversations used to interrupt my dreams.

     After a very late, extensive tooth brushing, with a unique mixture of powdered salt and ummikkari (roasted husk of rice), you used to have your breakfast around 10 30 am. Then you would sit and read the daily news paper “Malayala Manorama”, rather loudly, not only the regional, but also the national and international news. You would plan the lunch only around noon as you wanted to serve grandpa, a hot steamy meal.

    As I lie down on the cot, bubbling with colourful imaginations and fascinated by the funny figures on the wall caused by withered paint and funny movements of ants, you used to bring me a glass of kanji vellam. (red rice soup).

 “When will grandpa come for lunch?” My innocent question would trigger an unending emotional narration from you.
                                               Will Grandma allow me to continue publishing the rest of this letter?

Click here for Part-2 'Hot rice in an emotional bowl'


Who trusts the Auditors?

Sibichen K Mathew
                      How many of you evaluate the past performance and future prospects of a company before investing in its shares? We go by the popular perception, public profile of that company, or the ‘hype’ created by the company itself! The media, the consultants, the specialists and the advisors suggest the best deals to the potential investors. All of them give their views on the basis of the financial statements and audit reports of the company. That means, investors trust the audit reports. To put it simply, ‘people trust the auditors’!

                 Contracts are entered, money is lent, job offers are accepted, tax incentives are given, and above all ‘social recognition’ is bestowed on many corporates on the basis of a beautiful (well-dressed) balance sheet amply certified by auditors. 

                 Yes, we - the government, the investors, the lenders, the purchasers, the sellers, the service providers, the taxmen, the employees, the public - means, the entire society, repose faith in the auditors! And the auditors are supposed to vouch, examine, evaluate and certify the correctness or otherwise of the transactions of the company and its orientation. 

               Yet,  we hear well-established companies bursting like bubbles, share prices reaching rock bottom, promoters fleeing the scene, top management going behind the bars, and all stake holders watching everything helplessly!

What was wrong? Why these happenings?

                Audit, all over the world, is a powerful instrument to ensure accountability and financial regularity in all types of institutions and organizations. Though millions of investors rely on corporate audits, the recent corporate scandals all over the world have raised serious questions about the efficiency and effectiveness of corporate audit regulations and enforcement. The audit report is a powerful indicator of a company’s financial stability, accounting consistency and reliability. However, everything depends on how efficiently the audit was done and how clearly the transactions are reported in the audit report.

                   The Lehman BankruptcyExaminer’s Report  has come down heavily on the failure of Ernst & Young in preventing one of the biggest failures in the Wall Street that triggered global recession. Audit and accounting failures were also evident in the cases of BAE Systems , Olympus , Enron , World Com , Lucent Technologies , Sun Beam Corporation , Waste Management , Boston Chicken  etc. India has also witnessed a series of financial scams in the last decade especially during the liberalization period, most of which are rooted at accounting frauds. However, the responsibility of the auditors in these scams and their role in frauds are never viewed seriously.  Reserve Bank of India has a long list of companies who have been guilty of unethical accounting practices and diverted public funds. A number of companies vanished with crores of rupees immediately after the public issue. Financial statements of several companies became unreliable and depicted wrong state of affairs.Satyam scam is the best example.
The Problem areas
                The corporate scams and scandals happened in the world in the last few years are clear indications of the collusion between auditors and management in accounting frauds. They have happened either through active suggestions and consultancy to commit frauds or through deliberate omissions in the job. Inefficiency and technical incompetence of the auditors have resulted in some of the corporate debacles. It is foolish if one refuses to learn any lesson from the above scandals, thinking that these are just aberrations and will not recur.

                      In many cases it is seen that the audit firm is unduly dependent on the client financially. It may be due to the fact that the audit firm provides bulk of its resources for that client or it receives substantial amount of its earnings from that particular client. Thus it is a question of survival for the firm. It results in subjectivity in the performance and reporting of the auditor. In spite of strict codes of conduct, many auditors enter into financial transactions in the names of relatives with the client or the client’s associated concerns. There are also beneficial interest in trusts of the clients, and in shares and investments in associated concerns and also employment of close relatives in connected concerns and re-employment by the auditors in the clients’ concerns. Most of the audit firms involve in the non-audit work of their clients and they receive substantial portion of their earnings from such non-audit activities. The share of management consultancy in the total revenues of the top five chartered accountant firms in US, has gone up from 13% in 1981 to more than 50% by 2010.
Responses of the regulators and intra-disciplinary bodies
                     Sarbanes-Oxley (SOX) Act , is the US authorities’ response to political outrage in the wake of Enron, WorldCom, and other equally shocking failures of law, standards, governance and audit. SOX Act is considered as the legislation, which brought most sweeping changes to securities law, corporate governance, and the regulation of auditors since the Securities Exchange Act of 1934 . The SOX Act has international implications since the auditors of overseas subsidiaries or associates of US listed companies are obliged to sign up to it if they wish to retain the work. SOX Act laid down an array of strictures on company directors, especially CEOs and CFOs. Failure to comply could mean prison terms of upto 25 years.  The creation of the self regulatory board of Public Companies Accounting Oversight Board (PCAOB)  by the US Congress through the Sarbanes-Oxley Act 2002, was meant to give powers to the Board over the external auditors in order to guide them in auditing the public led companies. Though there are enough laws, the institutional mechanisms in India and many countries are marred by weak enforcement.

Need for a global policy 

                    In this era of globalization and transnational character of businesses, it is necessary to have effective global standards in accounting and auditing. The guidelines need to be uniform. However, the procedures can be flexible based on the particular country’s requirement, without compromising the fundamental principles. 

                 What is imperative today is the establishment of an International Quality Assurance Body that formulates universalistic principles and guidelines for all accounting, auditing and consulting firms all over the world. The body should suggest an appropriate mechanism that ensures quality, reliability and objectivity among audit firms. It is also necessary to have concerted action to prohibit direct or indirect monopoly in the area of auditing and consulting by a few firms. Proper auditor rotation, disciplinary mechanism, and an environment that ensures auditor independence can bring back public trust on the auditors.

You may also like to read following related articles:

Satyam: A case of worst audit failure

Frauds, Scams and a Corporate Lokpal




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