Case of Satyam Computers... why simple systemic checks are missing?

It is so simple to check cash flow statement of a company, sales receipts and the cash balance in various stated banks and reconfirm with the banks the cash balance. This one single figure if specifically certified quarterly there can be no such scam. Since even statutory auditors are seen to act blind, the Accounting standards can require the attachment of Bankers'certificates as additional schedule, to account for the claimed cash balance. it is unlikely that bankers would sign a wrong certificate.

It is again a case of missing the woods for a tree, the way we make accounts a complex matter missing the main objective to protect stake holders' interest and also make it difficult for the promoters to misrepresent facts in a serious manner. There could be manipulations in over statement of asssets and understatement of liabilities showing bloated profits, but the cash balnce and cash flow statements cannot be manipulated if you insist on attaching bankers statements as schedule to support the cash balance every quarter, and make it a publishable document. Hope ICAI acts now.

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