'Any business will have to face both ups and downs in its long lifespan'

Should accounting be driven by economic conditions?

Adding to the list of other ongoing conflicts is the recent spat between an industry body and the accounting regulator. The hot question is whether the Institute of Chartered Accountants of India (ICAI) should enforce its book-keeping standards relating to forex losses, especially when corporate performance is already bleeding due to the unfolding economic crisis.
Proposing that the norms be reviewed to allow accounting of foreign exchange revaluation gains/losses over the remaining tenor of the underlying items of borrowings or receivables, the Confederation of Indian Industry (CII) seems to ask the Institute, `Why rub salt into our wounds?' But the bean-counting bosses on Indraprastha Marg, New Delhi, are in no mood to revise their prescription of what they consider to be the right medicine.
To find more, Business Line interacted over the email with two experts in the field of accounting, and sought their views on the subject.
"I do believe the current accounting practice of requiring current assets and liabilities to be marked to market is a logical and reasonable practice," says Mr Shankar Jaganathan, Author, Corporate Disclosures:

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'Every year around 90,000 young, talented students are enrolling for the CA course'

Will watchdogs turn bloodhounds?

Uppermost in the agenda of the new chief of the Institute of Chartered Accountants of India (ICAI), Mr Uttam Prakash Agarwal, is the Satyam problem. “Members should not lose heart but must act proactively to safeguard the interests of all stakeholders,” he calls out to CAs, from the pages of The Chartered Accountant journal, March 2009.

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'Mostly decision or predictive analytics are delivered in a customer-specific model'

Add DA edge to financial metrics

Does DA or ‘decision analytics’ have the potential to play a key role in deal-making? Yes, avers Mr Phani Nagarjuna, Chairman and CEO of Nuevora ( http://www.nuevora.com/ ), a customer analytics firm headquartered in the US. “There is significant relevance of DA in M&A (mergers and acquisitions),” he continues, during a luncheon interaction at Business Line, on March 3. “As an example, the most important asset an organisation has is its customer base. More often than not, we value companies based on revenue projections and profitability independent of customer value.”

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'Economic fraud is spread across all economies...'

Analysis of corporate fraud

Mired in intrigue, Maytas the mirror-image of Satyam, is now under direct government glare, even as the investigations of the Raju revelations continue. Meanwhile, one wonders if the recent developments indicate that the corporate world needs more regulation. Inevitably, such instances raise demands of more regulation to deal with these particular types of fraud but the fact is there are enough existing laws in almost all countries which make it clear that a person should not maintain fake accounting books or that old investors cannot be paid with money from new investors without earning money through a legitimate business, or that a business should have real clients and real employees and that money trails must be transparent, observes Ms Kshama Venkataramiah Kaushik, a New Delhi-based chartered accountant and co-author of Corporate Governance: Myth to Reality ( http://www.lexisnexis.co.in/ ).

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