In India, as in China, two sets of accounts are kept.One for self and another for Tax authorities. How does one inflate profits and increase stock value the market?
-Inflate receivables
-Deflate the payables
-Prepare forged bank documents to show funds in reserve and cash on hand
-Form a subsidiary company in your relative’s name, acquire real estate, get government contracts,increase the co’s worth on paper( no project being started),make the company acquire the subsidiary at a higher price and manipulate what you have siphoned of in the parent company by adjusting the books of the acquired company .In addition to that ,create bogus employees on rolls, disburse salaries and have them credited in your relatives name, by resorting to bogus bank accounts.
Do not remit employee’s contribution of Provident fund to Government and siphon it off as well.
This is not a hypothetical case.IT major Sathyam has done it and Price Water House has audited the account.
Tag: Economy
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How to cook Books.
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Protectionism
What is the alternative?Let us look so called World leadership in Economy.Where has it landed?-in depression,as is being witnessed today.We know that allowing foreign imports on a grand scale may not be the sole reason for present economic chaos,but it is one of the major causes for it.If a Nation allows foreign products to swamp the market local industry will suffer,especially it is difficult to compete with China and Hong Kong products.As it is China investing in US bonds is cause for worry as it is likely to pave the way China taking control economically.Let there be Trade war.It is a double edged sword.
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On Stimulating Economy
The suggestion assumes that corporates were under-hired, which is not true.Secondly to avail the tax benefits- What is to prevent the corporates to fire the existing employees and hire new ones?
Creating consumers in general terms is not the solution.It is not what you spend but what you spend for that fuels economic recovery.If consumers for non essential items are created, situation shall worsen.If you create consumers for infra structure( results will take some time in coming) then you are on a safe wicket.
Merely increasing jobs for the sake of creating consumers shall result in negative growth of the corporate sector.Best way is to explore new areas of investment in goods and services and effect a cut in imports.
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