Saturday, November 2, 2013

ICAI PRESIDENT INVOLVED IN SCAM....GIVE FINANACIAL AUDIT TO COST ACCOUNTANTS

Chartered Accountants are again back on the stage of making stupendous growth in cooked financial papers. Auditing standards have been shattered and it is quite clear that its high time that the Indian government should provide Cost Accountants an equally opportunity like the Chartered Accountants in financial accounting.  This time the ICAI President Mr. President Subodh Agrawal is involved into the matter. I find its an high time to provide Cost Accountants an equal right of Financial Audit since if the president of an Institute is involved then what we can expect from the other members of ICAI. We have given the protection of the Indian economy in the hands of thieves who are prudent enough in financial manipulations.

Doesn’t it seems that too much stress and dependence have been given over the years from Global Trust Bank to Satyam and Now Gujarat Nre Coke industries matter. ICAI talk a lot about its auditing standards and its auditing practices but this time they have proved repeatedly that they are king of cooking financial numbers and depriving the value of the investors and share holders of this country. They are busy is filling up the pockets by making false balance sheet and doing wrong practices in auditing. In the recent case which has come it is quite surprising to find that how a Chartered Accountant firm who has given a clean chit to the financial papers of Gujarat NRE Coke, a company listed both on BSE and NS. The company is telling shareholders that in its consolidated financial statements, 91% of its assets and 64% of its revenues (which are in Australian subsidiaries) are unaudited. Well the entire audit was guided by ICAI President Mr. President Subodh Agrawal who is the chairman of the audit committee of Gujarat NRE Coke.

The Indian auditor of the consolidated financial statements (a Kolkata-based firm) mentions it as "Other Matter" in the audit report and says he has relied on "Management approved financial statements" as far as Australian subsidiaries’ accounts are concerned. The auditor of the Australian subsidiaries (Grant Thornton in Australia) says they cannot express an opinion on the financial statements since they have doubts on the company's ‘Going Concern’ assumption, valuation of impairment and assets, deferred tax assets, recoverability of trade receivable and completeness of contingent liabilities.

Few of the matters which have been found very much surprising is about the dates of the auditing report on which the Indian chartered Accountant firms as affirmed the financial statements to be correct. The Indian auditor’s report is dated 30 May 2013 while the Australian auditor’s opinion (or refusing to issue one) is dated 15 August 2013. Did the audit committee/company disclose the Australian auditor's opinion to the Indian auditor. Moreover even after the Australian auditor Grant Thornton in Australia) says they cannot express an opinion on the financial statements the Indian Auditor did not withdrew his earlier clean chit report affirmed to the company  despite of the Australian Auditor report.  Moreover according to the statements of the Indian Auditor the audit was carried according to the guidelines of the  ICAI President Mr President Subodh Agrawal .

But being a president he did not take any steps to review the audit reports for the company. Questions which comes in mind is that why did they not inform shareholders of such a critical development? Does the ICAI President have any moral right to continue in office and preside over the fate of other members’ disciplinary cases. Now what we can expect from ICAI members if the President itself is involved in such practices. ICAI gives presentation about ethics and business practices and professional practices but itself they are doing all wrong practices. How can an president ignore the report of an Australian Auditing firms appointed by the same company and despite of its reports of significant threat doubts ICAI President ignores the report and gives clean chit is matter of high concern

 This is what the note of the Indian auditor says: (Page 51 of annual report) (http://www.gujaratnre.com/Annual%20Report/GNCL%20Annual%20Report%202012-13.pdf )
Written By Indraneel Kripabindu Sen Gupta.

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