For corporate India, closer scrutiny of financial numbers comes at a cost

Experts say window dressing of financial numbers is a common practice adopted by companies to improve the overall financial outlook and profitability of a company

In a recent survey conducted by international law firm Baker McKenzie involving 100 Indian C-suite executives, compliance and regulatory scrutiny were identified as the biggest macroeconomic challenge facing Indian business. These were also seen as the area of greatest cost increase over the next two years by business leaders.
 
While questions are being raised in investor circles over trustworthiness of corporate India’s balance sheet numbers, the recent instances of slip-ups on the governance front -- such as siphoning off funds to related parties, conflict of interest situations of promoters/key managerial person, disclosure levels on promoter holdings, pledging of promoter