About the Blog
This is my diary....what I make sense of, around me. You'll find short prose on contemporary topics that interest me. What can you expect - Best adjectives? …. hmm occasionally, tossed around flowery verbs ?…. Nope, haiku-like super-brevity? … I try to. Thanks for dropping by & hope to see you again
February 21, 2009
The urgency of such a thought stems from the turmoil that the world is facing today due to the enormous fissures created by Economic, Social & Political turmoil in a truly globalised world. Lets take the classic case of Kyoto protocol, a global call on reducing emissions that is impacting global warming. It called for countries to show responsibility (of a global kind) and to take steps & measures to reduce their carbon footprint. But alas, many countries bickered and eventually dithered on their commitments blaming each other eventually displaying just an ordinary human trait (“Most species are individually stupid but collectively smart. Humans are the opposite, they are collectively stupid but individually smart” -Edward Wilson). Even the US of A, supposed to be a lone superpower and Global leader made vain attempts to block & impede progress at the event prompting a small nation representative to remark “ If you cant be a leader (and set example) then step aside”
A country that has been a trendsetter in this respect & that i admire has been Norway , the "Land of the Midnight Sun", a small Scandinavian country of 4.7 Million people that displays remarkable alacrity and collective conscience in this respect. It is the only nation in the world that gives away 1% of its GDP as foreign aid and spends substantially on the protection of rain forests. The country has resolved towards making its Oil & Gas sector as efficient & environmentally friendly as possible. It is also probably the only country whose emissaries are respected for their apolitical & neutral standing and are generally in the forefront of arbitration/mediation in conflict ridden zones. It is also a remarkable coincidence that this country ranked highest of all countries in human development index from 2001 to 2006, and was ranked second as of 2008 (behind Iceland). It was also rated the most peaceful country in the world in a 2007 survey by Global Peace Index
February 11, 2009
Where is the Passion in this form of game? Cricket is religion in this country & its proponents reigning Gods right? And is one magic formula where our million mutinies gets temporarily absolved in oneness with the Blue brigade when they fight the marauding Aussies or motivated Pakis. Can the same be even remotely replicated here in IPL? Agreed, its packaged for entertainment but why in the name of Almighty should I show allegiance to some funny sounding city based team? After team India I can only identify with team Karnataka , yaah with that ‘Soil ke Phool’ feeling (duh).But with Jack Kallis , Kevin Peterson & ilk , and holding Royal Challenger flag? Naah...i’d rather take it as some offbeat advertisement and endorsement for Mr.Mallya & his tipple.
What were the Bollywood film heroines doing there at the auctions? Maybe to keep the glamour quotient off the field, remember that there are firang (Redkin) cheerleaders to take care in the field. But what the heck , are they not doing the same thing what Mandira did to anchoring & commentary during World Cup? Who cares as along as the eye balls are rolling in.
What about economics, is there anything called recession here? I read somewhere that it was the only asset class (for investors in IPL teams) where one could have got 100% returns in the past one year. Maybe that’s what prompted Raj kundra to pump around $16 million in Rajasthan Royals, prompted by all the calculators on valuation & RoI that JP Morgan & KPMG would have churned out. With million dollar babies (read players) around ,will the average cricket fan beat his recession blues to watch the celebrity slambang talent with price tag glitter remains to be seen.
What will happen to the real art & craft of the game? I mean the one suited for the original longer version of the game. T20 seems to be the ‘in-thing’, with its testosterone influenced plot, and IPL has taken it further by placing it on a commercial easel with a heady mix of glamour and money. Actual Cricket is dead & buried, long live Cricket!
February 6, 2009
Only the capital city I am told receives regular electric supply, in Northern & western UP one would be lucky to receive a couple hrs of electric supply. Now that seemed a scary thought in the biting cold weather that was in the state during my visit , the morning local paper said that about 60 people had died due to a dry cold winds that swept the state in the last 2 days. One could see people living in menial conditions draped themselves with anything available, plastic sheets left over from the Buddh market, used political banners with Mayawati peeping out etc. I met a senior Babu ( Bureaucrat)in the state’s vast machinery whose first reaction to my Business proposal was as follows
Aap yehan kuch nahin kar payenge
(आप यहाँ कुछ नहीं कर पाएंगे – you cannot do anything out here)
Yehen ka system jante nahin hain
यहाँ का सिस्टेम जानते नहीं हैं - you do not know the system here)
Aap Bangalore ke swasth mahoul se aaye hein aur aap ka koshis yehan bekar hai
आप बंगलोर के स्वस्थ माहौल से आये हैं और आप का कोशिश यहाँ बेकार है - you have come from a clean environment like Bangalore and your efforts will be in vain )
In some ways he said the truth , the system he spoke was all prevalent , you could only feel it but difficult to comprehend fully. The murkiness & intrigue was characteristic of this system and I realised that after 2 days of interacting with different people. I met a top ranking minister in the Behenji’s Govt who lived in an environment that was in stark contrast to the general surrounding. His residence was a sprawling one with neatly whitewashed buildings, clean surroundings , not so polite orderlies & a bunch of tow’y bureaucrats and other political favour seekers . This was in stark contrast to the general surroundings in the city. The minister for a change was in coloured clothing & sports shoes. I had hired a auto (and my chauffeur turned out to be a guy named Prem) for a couple of hours for the two day business visit & he turned out far more pleasant & friendly than his counterparts in Bangalore. He has given me his mobile & I have promised to call him if I ever were to visit Lucknow again.
February 1, 2009
Q:Is there still too much that firms like PWC do in terms of services to one client – you’re doing auditing , you are doing tax advisory and you’re also doing consulting for them. Wouldn’t there be some sort of conflict that gets built into this kind of model?
A: I simply don’t accept that. There’ve been considerable number of academic studies that have shown that where we have engaged with a client in a broader set of activities, the likelihood of audit failure is much lower because we have deeper understanding of the company (sic). Another piece of that is when we audit, we don’t just use accounts. Our auditing process requires tax people, it requires actuaries, it requires technology people – all different type of skills.If you were to take one of these audit firms & say ‘you only do audits’, we would have a very difficult time attracting those kinds of talents and the quality of audits go down
Q. Earlier you’d mentioned that businesses would continue to make mistakes. No one has issues with mistakes that happen due to bad strategy. But what happened in Japan with one of your clients in 2006 was cheating and that affected PwC very badly. So, have companies actually learnt and are they keen on being clean?
A. I think the vast, vast majority of companies have always had a commitment to being clean, to do the right thing, before Enron, and after Enron. But I also believe that you operate in a world where if people want to break the rules, if they feel personal pressure or greed, they’ll try to break the rules. And you need processes and activities to keep that from happening. And whenever we feel that one of our people has done something wrong—not just made a mistake, but something morally illegal—we take very harsh action, and our situation in Japan shows that. We, effectively, shut that firm down. It cost us hundreds of millions of dollars of business, but we didn’t blink.
Q. But do you think it’s possible for auditors to prevent fraud?
A. Actually, I think auditors prevent fraud every day because we are the eyes and ears of industry. We come to the table with an independent point of view. We test, question, and we challenge. CEOs encourage us to do this. So, there’s no question in my mind that the entire audit profession has, over the years, prevented fraud. We find often, during the course of a year, people pushing that envelope. And most of the time it’s not visible, it’s not public because it’s fixed before it ever becomes a factor. People are fired, and it’s very quiet and that’s the job we have.
Q. In some sense, you’re not just the eyes and ears of the industry, but also the conscience of the client.
A. Yes, and boards… you asked about change. Today, CEOs and supervisory boards are deeply into what we do. So, it’s not “we and they”, we’re in this with the boards and with the management. Reputational damage done through financial mis-statement is huge and no one wants their name connected to that. No board member, no supervisory board member and no CEO. Sometimes, the pressures they put create that incentive in their company and they have to understand that they can only push so far before people might go too far.
In an interview earlier in 2003 in the same Magazine, DiPiazza while making a case against Auditors being consultants has echoed “Actually, you do not need a consulting project to corrupt you. The audit fee is large enough to corrupt you if you aren't a person of integrity.”
He is the author of the book ‘Building Public trust: The future of corporate reporting’ , which for all you know may be being read & reviewed by Ramalinga Raju in his downtown prison in Hyderabad.