Rule Of Law
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Rule of Law

Following the startling disclosures in the Satyam episode, people have been questioning the role of law implementing agencies such as RoC, SEBI etc. I  have a very peculiar experience with such law enforcement authorities inthe State of Kerala. 

Our company' s auditors usually qualify the status of sundry debtors, creditors as subject to confirmation and reconciliation as usually we do not send in our request for balance confirmation as mandated. Subject to this, they used to certify that the balance sheet gives a true and fair view of the status of the Company as on date of balance sheet date. We file this Balance sheet with Roc Ernakulam. We were aghast, when Roc Sought an explanation from our auditor as to how the balance sheet could be certified to have give a true and fair view when the sundry creditors( payables) and sundry debtors (Receivables) are subject to confirmation and reconciliation. One should give thumbs up for Kerala RoC in implementing the law in letter and spirit. 

Then there are these ESI inspectors who come to inspect accounts. We have two units one in Kerala and another in Coimbatore Tamilnadu. The balance sheet is compiled for both the units consolidated. The gentleman will inspect the balance sheet and ledger of the chalakudy unit in kerala and would demand to know as to why we have not remitted ESI in Kerala for certain expenses incurred in Tamil Nadu. We will have to provide him all the data from the books of accounts of our Coimbatore unit to satisfy him. I wonder if this inspector is deputed to verify the multiple locations of many companies may be Government will walk away with a windfall of contributions, penalties and interest.

The Sales tax people are still better. They will simply add back all other income as sales forgetting that the basic premise of a sale is that there should be movement of goods or transfer of title of goods which should have been completed in order to call it a sale.We are to submit all evidences to claim exemption from sale. I tried to argue with an officer as to our accounts are duly audited and we comply with accounting standards issued by ICAI being a Public company. He would have none of it. I have my authority to presume there is evasion or attempt to evade turnover. You satisfy my queries else pay taxes on the turnover determined under best of my judgement.

These people need to investigate corporate frauds of higher magnitude outside the state of kerala
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