Lessons to be learned from India

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Dennis Howlett has looked at the developing Satyam scandal in India:

There's an old saying: 'where there's a will, there's a way' and that is certainly true in India. Earlier today, the Indian government stepped into the troubled company and disbanded the entire board of directors.

And note the government said this too:

We are determined to reach the truth but are equally concerned with the fate of employees and other stakeholders.

Action against auditors of the company has already been initiated by the ICAI,

As Dennis says:

I don't know if this is a precedent but in the context of ongoing compliance issues, this is an excellent example of a government realizing that the risks in the current situation are too great for all stakeholders and is therefore taking decisive action. What's more, we now know a little more about what was happening at the company. Equally, we also know that PwC is now definitely under the hammer.

More to the point: can you imagine the UK or US governments taking similar action? We often think of India as a land of great inequality and as a mildly corrupt regime. I can guarantee that in the eyes of the world, such actions, when taken appropriately and at the right time are confidence boosters.

But the Boards of the banks that failed in the UK are still in place (by and large). I know they didn't commit fraud. But they failed spectacularly. Similar action would have been appropriate their too.

As would action against their auditors have been right.

But it didn't happen. I think we have a lot to learn.