Three auditors reveal to BT, the dubious nexus between auditors and corporate management.
I had always fancied becoming a practising chartered accountant. The enormous responsibility that is bestowed upon an auditor awed me. In fact, no other career ever crossed my mind after I came to admire auditors. After completing my BCom, I joined a well respected audit firm in Chennai which has been in existence for over 40 years with a strong Income Tax and Corporate practice.
The first couple of years were fun as I assisted my seniors in auditing various types of companies. Company Law particularly attracted me and soon that became my area of expertise.
It was only after I became senior enough to finalise the audits of major companies and banks on my own did the reality sink in. A few years ago, we (I and a team of 10 junior auditors) had just completed the statutory audit of a large bank. The audit brought up a large quantum of non-performing assets (NPAs) provisioning, which would result in the bank posting a loss.
The bank management was terrified and kept providing last-minute documentations to reduce the NPAs which were against the norms. My auditor, to my utter shock, went along with them, knowing fully well the management's attempts to window dress the accounts.
In the end, the NPAs were suitably diluted so as to enable the bank to post a marginal profit.
In another instance, I was given the responsibility of auditing a diversified group. During the course of the audit, we realised that the related party transactions (between group companies and partnership firms run by the promoters) were not adequately disclosed as per the provisions of the Companies Act. Transactions that were of significant value were not done at market price between the company and group firms.
Also, the dues to the company from the group firms remained unpaid. In a way, a company with public shareholding was funding the operations of firms run by the promoters and their family members. This was disclosed in the initial report that I prepared after the audit. But the final report made no mention of it.
I qualified as a CA even as my three-year training came to an end. Every one in the audit firm, including the partners, thought I will join them, but by then I had lost all respect for the profession. I left the firm to take up a corporate job - a role where I have nothing to do with audit or an auditor.
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