Professionals, Cheats and Mercenaries 3

The science of quackery permits proliferation and creation of a galaxy of cheats and mercenaries in the profession. Accounting is a field where such luminaries flourish, though in pockets. Real professionals render excellent service to the society and the nation. They observe principles and respect ethics. They update their skills and level of competence. They are respected and individuals and institutions seek and applaud their services for good causes and professional requirements. They advise business how to keep their house in order. They do not advocate money laundering. They are conscious of their role in nation building and enable the business to pay legitimate taxes and in time.They are assets to the nation.

In contrast we have slippery accounting professionals. First they offer to oblige the client by playing acrobatics with figures. Some of them show profits even when the business does not breakeven. Assets are inflated in value. Some of them act as agents of insurance companies and suppliers knocking away sizeable commission flouting all cannons of ethics. Their expertise in fabrication of figures is matched with the skill in fabrication of truth. They give rise to the strong feeling that the balance sheet is only to be considered as a sheet of paper and just like variable costs and variable budgeting one can have variable balance sheets. The content of the balance sheet will vary with the purpose. If it is for seeking finance it will present a rosy picture. If it is for tax purposes it will show loss.

In the delicate task of balancing the sheet, they will include dead assets as current assets and in inventory. Certain bad debts will be included in the current assets though in reality the current has washed away the assets. In some cases the manipulation is so great that the packing cases or cartons alone will remain in the store with the contents evaporated. This technique is to draw funds from the bank against stocks. The sales proceeds shown under sundry debtors will be directly collected. Of course they show fictitious debtors in the sheet for others to see and satisfy.Their ingenuity travels fast so that proper source of funds is shown by the promoter borrowing from his grand children aged two to ten and sometimes up to eighteen. This will be short term as well as long term.

Window dressing of balance sheets is an art perfected and presented with charts and graphs to diffuse the attention of those closely scrutinizing them. While scrutiny the inspecting officials are hood winked by solid offers of conducted tours in nearby areas and home delivery of company products to last for a season and with the best quality. All these of course are done at the promoters' cost. If you ask details they will say these are trade secrets and should not be divulged. The ghost debtors and creditors come to their rescue for balancing the act and the sheet and of course for a consideration which is proportionate to the risk they undergo and the amount involved. Junk assets, not even fit to be called and sold as scrap, will fill up the deficit in the current assets column and ensure balance. Often they will be inflated in value so that the assets show a healthy strong base. They also certify non existent fixed assets and intangibles.

Instead of need based finance they advocate greed based finance which brings great money to the client as well as to the consultant. The Jekyll and Hyde balance sheets are part of the system of accounting which they worship and which provide them food. Some of them act as suction pumps by taking cuts on purchases and offering miscellaneous services. No doubt these wizards of lizards are sought after and they have a roaring practice though the clients roar in pain in the long run. (To be continued)