This refers to "Do not throw away the baby with the bathwater" by Somasekhar Sunderesan (June 20). The author has admitted that he is professionally attached to the assurance industry. So it is a case of conflict of interest. Even taking his argument on merit, one can hardly agree that the assurance industry is being thrown away with the bathwater. The assurance industry has been defined by him as the chartered accountants and auditors who are required to certify the correctness of the financial transactions of a company which appoints them. I have worked as independent director in several private companies after my retirement for much more than a decade. I have been chairman of Audit Committee also. I realise the importance of the auditors (who are chartered accountants) who really know the details of all the transactions of the company as they examine all vouchers and find out if the various corporate rules have been obeyed by the company. The summary of the transaction details, gross profit and net profit etc are placed before the Board of Directors. If they do not provide a correct set of figures due to inefficiency or collusion, the decision of the Board will never be correct. Presently, the regulators have punished a few of the auditors by banning them for some length of time. This is highly praiseworthy and will prevent corporate fraud. Such move cannot be called a knee-jerk reaction. Good result has followed due to this as Price Water House, a famous audit company has walked out of auditing the accounts of a suspect company. Calling such action as theatrical and based only on suspicion is most unwarranted. The author is an interested party and his opinion is clearly prejudiced for obvious self-interest and is vitiated by conflict of interest.
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