No law can guarantee safety from fraud, says ICAI president
Corporate enterprises will have to make extra efforts to avoid fraud in their companies as no law can guarantee against it, the Institute of Chartered Accountants of India (ICAI) president said.business Updated: Sep 19, 2009 23:15 IST
Corporate enterprises will have to make extra efforts to avoid fraud in their companies as no law can guarantee against it, the Institute of Chartered Accountants of India (ICAI) president said on Saturday.
"No law can save companies from frauds, and Satyam is a recent example. The shareholders have to be extra cautious and remain alert," Uttam Prakash Agarwal told IANS on the sidelines of a two-day national conference of chartered accountants which started in Chandigarh on Saturday.
"They (the shareholders) cannot leave everything on the auditor or any other fellow; they have to maintain constant check in the company's affairs to avoid such incidents," he said.
Agarwal was the head of the high-powered committee which probed the multi-million financial fraud at Satyam Computer Services, disclosed by the firm's founder Ramalinga Raju himself in January and ICAI soon began its probe into the matter.
"We cannot change the human tendencies but we can certainly make our system more foolproof. Chartered Accountants (CAs) should be given more authority so that at any point of time they can direct the management to change the accounting policies of the company if they suspect anything fishy," Agarwal said.
Talking about the emerging scope of CAs, he said: "Now a CA's role is not only limited to managing accounts or scrutinising balance sheets but his scope has widened manifold. He is looking after operations, marketing and various other aspects and has emerged as a hard-core professional in the global market."