Monday, Jul 14, 2003
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By Our Special Correspondent
Handing over the first copy of a `white paper' presented by a voluntary organisation committee formed to ensure a level-playing field for Indian Chartered Accountants, to the chairman, Task Force for River Inter-linking, Suresh Prabhu, Dr. Joshi described the issues raised by the white paper as ``very fundamental.'' The problems posed by liberalisation and globalisation were ``not confined to the accounting profession.'' One had to look at the larger picture. The basic flaw of globalisation was the high cost technology, need for large capital inputs, high-energy consumption and low employment generation. The MAFs were tools trying to protect this structure.
According to the `white paper on multinational accounting firms operating in India' prepared by the NGO, the Chartered Accountants' Action Committee for Level-Playing Field (CAAC), MAFs have been caught in different frauds in which they have either actively colluded with the offenders or have been silent witness; their silence purchased for tidy sums of consultancy fee. MAFs have been repeatedly caught in frauds and malpractices, which have forced them to seek compromises.
The ownership of these firms is a secret as they are based in tax havens. Also, they claim global presence when they solicit business, but this vapourises when the question of accountability comes in. But the alarming part is that from around the 1970s, audit work has ceased to be their main income; it has shifted to consultancy.
The white paper was brought out in the public interest to inform Indian business, finance and government sectors, policy makers and professionals. ``Because of the inadequate awareness of MAFs, the Indian business, particularly, the corporate and finance sectors, and also the Government and policy makers, implicitly trust them and their professed and advertised competence and ethical standards. The elite public also tends to believe the Indian establishment's assessment of them. There is also some kind of unverified and unassessed aura about them, which prevents proper assessment about them,'' the white paper notes.
The 141-page document also seeks to highlight how India's negotiating capacity in the World Trade Organisation has been eroded, the consequences of the illegitimate presence of the MAFs here, how the Indian accounting profession is not alert enough, how the professional opportunities emerging from globalisation has been monopolised by the MAFs and how the Indian CA firms are weakened at home and deprived of a chance of becoming global players.
Mr. Prabhu, a chartered accountant himself, said MAFs too should adhere to Indian laws, if they operated here. ``The same restrictions should be applicable to all.'' They should be permitted to operate in the country as long as they were open to public scrutiny.
The CAAC convenor, S. Gurumurthy, said MAFs controlled virtual money (options, derivatives and futures) and hence directed the path of globalisation. The present attempt was not to seek ``opportunities for a few assignments in India.'' The aim was to control the levers of global finance.
The Zee TV chairman, Subash Chandra, reminded that merely by asking for a level-playing field, no one would grant it. He wanted chartered accountants to get together to form larger firms and work in the international market.
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