Dela s with the role of professionals, particularly accounting professionals in ensuring the survival of a business

1. Role of Professionals in Sustaining a Business-B.V.Raghunandan, SVS College, Bantwal Institute of Chartered Accountants of India, Udupi Chapter December 20, 2010

2. A Professional A person with a highest level of knowledge in a specialised area Possessing a prescribed qualification as per law Legal sanction due to his work affecting lives of hundreds and thousands of people Professional Ethics A non-professional can not duplicate the work

3. The Idea of a Professional ‘A true professional realises that being a professional is nothing short of a religion and that the capacity to serve is indeed a blessing in life’- SubrotoBagchi -case of Mahadeva, the street dweller -case of I.U.Khan and R.K. Anand in Sanjeev Nanda case -professionalism involves doing a dedicated work without supervision

4. Types of Professionals ‘I am the King’ Professional ‘Customer is the King’ Professional ‘Government is the King’ Professional ‘Society is the King’ Professional ‘Truth is the King’ Professional

5. Business Sustainability Financial Reporting Accounting Professionals Individual Greed Institutionalising Individual Greed Helping Professional Managers Collusion with Promoters Ill advising the Promoters

6. Double Entry System One of the Greatest Discovery of Mankind Discovered by Luca Pacioli Inspiration for Newton’s Third Law of Motion Only Comprehensive System of Book-Keeping Stability, Flexibility and Agility Compatible for Computerised Accounting

7. Accounting Principles Evolved by Practice Fixed Assets at Opening Balance less Depreciation Current Assets at Closing Values Accounting Conventions and Concepts Simplicity and Stability in the Long Run Accounting was a Passive Function of Management

8. Genesis of Vested Interest Managerial Bonus as a Percentage of Profit Joint Stock Form of Organisation Listing of Shares on a Stock Exchange International Raising of Finance Meeting Shareholders’ Expectation Investment Analysts Quarterly Reporting Accounting became an Active Managerial Function

9. Manipulation of Figures Accounting Professionals Auditing Creative Accounting Auditor-Management Nexus Need for Concealment of Manipulation Making Accounting Complex Making Annual Reports Voluminous Attractive Annual Reports

10. Means of Scandals Accounting Standards Auditor: Policeman-Thief-Forensic Expert Elaborate Reporting So- Called Transparency in Accounting Credit Rating Agencies Band-Wagon Mentality Cash Oriented Conscience Professional Managers

11. Accounting Standards Started at the Initiative of IOSCO Uniformity Defeated at the Inception Different Standards for Different Countries Complex in Nature Ever-Changing in Nature Too Many Standards Impossibility of Off Hand Preparation of Annual Reports

12. Auditor: Policeman-Thief-Forensic Expert Not a Watch Dog any more Party to Sharing the Loot Guided the Companies in Manipulation of Accounts Helped Accounting Bodies to Prepare Accounting Standards Helped Clients in Violating Accounting Standards Investigated Accounting Violations

13. Elaborate Reporting Voluminous Reports Expensive Reporting Led to Delisting of Shares Wasteful Expenditure in Creating a Hype Efforts to Cultivate Media Coming up with New Practices like Segment Reporting, Related Party Disclosure Proliferation of Statements like Cash Flow Statements and Fund Flow Statements

14. Transparency in Accounting Too Many Details Too Many Statements Impressive Accounting Photo Features of Smiling Faces Expensive Reports Vital Information was always Sensitive Technical Details and Jargon

15. Credit Rating Agencies Third Party Certification Part of Groupthink for a Fee Changed rating on Generalities Lot of Vested Interest in Rating A Ring of Bandits Increased the Financial Cost of Operation Multiple and Varied Rates Shopping for Rating

16. Band Wagon Mentality Impressive Operations Conflict of Interest in Financial Services Mutual Agreement Club No Investigative Effort for the Unfurnished Facts Sensational Media

17. Cash Oriented Conscience Slavery to Remuneration & Perquisites Selfish and Self-Centered Attitude No Protection to Whistle Blower All Pervading Cowardice Unpracticing Values and Hypocrisy

18. Professional Managers Gypsies in Search of Treasure Need to Exploit the Organisation and Run Qualification and Empty Work Experience and Not Quality Highly Commercialised Culture Expensive Services Responsible for manipulation

19. Agenda Simplification Scrapping Accounting Standards Basic Annual Reports Fiduciary Responsibility of Credit Rating agencies Loyal Managers Random Selection of Auditors by Government Random Selection of Independent Directors by Government

20. THANK YOU