GLG News by IFRS Accounting Specialists

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Banking Sector and The Reform of Markets - An Accountant's View

January 29, 2009

Analysis of:Banks boosted as Geithner talks of a clean-up | www.ft.com

Ever since the meltdown in derivatives started effecting the banking sector and clogged house prices, mortgages and credit in the US, British and other global markets the authorities in most major markets have been trying their best to get the system on track. The referred article speaks of certain possible positions being considered by the Obama administration. In this analysis I speak of why the options being considered do not make sense to my mind.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Madoff Scandal - The Unravelling Threads - JP Morgan - The Possible Effects

January 29, 2009

Analysis of:JP Morgan Exited Madoff Linked Funds Last Fall | www.nytimes.com

I have always maintained that you have to pull a single thread to tear a cloth or unravel a fraud. This has now started happening in the Madoff case. The timing of certain transactions of JP Morgan appears to be the thread and in my opinion will have far reaching effects. JP Morgan is a name with a chequered history and has always (to my knowledge) acted in the best interests of investors as well  as the capital markets. A century back it effectively played the role of the Fed in the crisis of  1907-8. In this analysis I look at how times have changed and where the thread is indicating it may lead in the Madoff fraud.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Corporate Governance and Audit in the Context of the Satyam Fraud

January 22, 2009

Analysis of:Proforma Distractions at Satyam | www.cfo.com

The referred article highlights the weaknesses in corporate governance and audit practices in the case of Satyam as well as in emerging markets like India. The fact that there was a failure on both counts in the Satyam case is to my mind established. The fact that the company's Chairman has publicly made such a statement and the auditors have gone on record to state that their audit should not be relied upon is sufficient to draw the right conclusions. Yet to generalize as the referred article does on Indian audit practices is to my mind not correct. In this analysis I look at why Indian audit practices are as good as any other while at the same time not being infallible.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Satyam Fiasco - Accounting Fraud - Audit Quality - A Look at Some Issues

January 12, 2009

Analysis of:Govt. announces supersession of Satyam Board - to appoint 10 new directors | economictimes.indiatimes.com

The Satyam fracas is one more fraud in the long history of misappropriation of resources given in trust to individuals and institutions. This particular episode is drawing heated debates in India - especially on television and print news. What this entire episode however brings to me is the following - (a) any control system is only as good as the people administering it. (b) audits are not a replacement for responsible management (c) Laws and regulations cannot deter persons who wish to defeat them - atleast temporarily. What is required is that companies are administered ethically and in accordance with rules of conscience. In this analysis I look at the entire episode from the viewpoint of audit quality and administration of  accounting standards.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Madoff Financial System -Neglected Risks, Warnings, Controls and Confused Monetary Policy - Where Are We Headed

December 18, 2008

Analysis of:Madoff Fallout Spreads Worldwide | www.ft.com

The Madoff scam and the disappearance of over $50bn to God knows where is intriguing by itself. The entire scam and the confused monetary and fiscal policies of today point to a system of neglected risks, warnings, ignored controls and  a  lot more. In this analysis I look at what to expect after the Madoff scandal.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

Accounting - Fair Value - The Bailout Package - Why Standards Will Stay and Improve

December 10, 2008

Analysis of:Cox : Accounting is Not a Fiscal Policy Tool | www.cfo.com

The comments of Chairman Cox are very heartening and are the culmination of a long and active drive by Accountants to diverse Accounting from politics, fiscal policy and taxation. While accounting is subject to several assumptions, the role of standards is all pervasive. The indicator that fair value plays a critical role along with valid guidelines for impairment of assets is bound to play an important role in the ongoing economic events. In this analysis I look at how fair value, the bail out package and accounting standards are all interlinked.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Changing Effects of Economic and Political Consequences on Accounting Rules - The Fair Value Debate

November 14, 2008

Analysis of:Could Bank Rules Break The Fair Value Debate | www.cfo.com

Accounting rules are being blamed for causing the decline in the  global economy, the rising jobless figures and all other multifarious ills which are gripping the financial sector and capital markets. In the midst we now have a proposal that financial solvency for banks should not be measured based on accounting results and accounting rules. In this analysis I take a look at some of the aspects of this proposal.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Global Financial System - Required and Expected Changes - A Look at Expectations

November 10, 2008

Analysis of:IMF Chief Curbs Summit Expectations | www.ft.com

We are told not to expect Bretton Woods II on November 15, 2008 when the global financial summit takes place. But then are we expected to see no change in the present global economic turmoil. In this analysis I state what I expect to happen on the global financial scene.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The CDO vehicle and the rapidly reforming financial system - A look at the effects of monetary policy and accounting changes

November 10, 2008

Analysis of:Derivatives:Giving Credit Where It is Due | www.economist.com

We live in a interesting recessionary world. The global economy is retracting and the search is on to find the culprit. The US President Elect says that tackling the economic crisis is his top priority. Central Banks and  World leaders across the globe are echoing the same tune. But no one knows the answer which as the  song  goes " The answer my friend is blowing in the wind". In this analysis I  look  at  the  effects  of  the  the CDO vehicle  and  the  reforms needed in the  financial system. I  also  examine the effects of present monetary policy which to my mind are completely misguided and the effects of accounting rules.

Nitish GroverPrincipal, OwnerNitish Grover and Associates

The Increasing Relevance of Going Concern in the Declining Economy - Implications for Analysts

November 10, 2008

Analysis of:SFAS Exposure Draft On Going Concern | www.fasb.org

Going concern has since as far as I can remember been a fundamental accounting assumption and has been codified in general technical literature, International Standards, FASB standards, Indian standards and generally been accepted globally. The exact methodology to arrive at a conclusion of going concern has however hardly ever been codified.  The FASB exposure draft on the subject does path breaking work in this area. In this analysis I look at the concept of going concern and its relevance in the present global financial economic environment.

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