An Indian Civilizational Perspective

Satyam CFO: I paid no attention to the Balance Sheet

satyam CFO.jpg

In 2002, I tried (without success) to induce Stanford University to retract my MBA. Here’s why: The dean of the business school when i got my degree there was Robert Jaedicke. He was also an accounting professor, and I took advanced accounting course while I was a student. I last saw Jaedicke, 30 years later, on TV. He was testifying about his involvement in Enron fiasco. Not only was he an Enron board member – he was the chairman of the board’s Audit Committee. Yet he claimed he had no clue about the truckload of peculiar transactions that brought the company down!

When a guy who served as Enron’s audit boss…. the last bastion of bean counting… invokes the “clueless” defense, it makes you wonder: Did he have any clue as to the usefulness of the curriculum at the school where he’d been a dean? Did he have any clue as to what lessons I’d extract from his “advanced” accounting course?

starts off Tom Peters in my favorite book “Reimagine”

The tainted Corporate bosses suddenly feign ignorance and idiocy. We had seen that happen during the Enron trial and others in that era of scams in the US and now we are seeing it in the Satyam case.

The CFO of Satyam now gives the same “Clueless” argument! [1] It makes you wonder – are these companies going down due to malafides or sheer incompetence of some morons!? If as a CFO you don’t know anything about your Balance Sheet.. then WHO DOES??? And if you were not paying attention to the company’s Balance Sheet – what the heck were you paying attention to?? You can’t even invest properly in anything worthwhile if you do not know what your B/S is like!! How could he even raise money for his company if he didn’t know how much cash he had?

With statements like:

“I do not pay much attention towards the details of the balance sheet. “

and

“At the end of the 4-5 hour meeting, the balance sheet will come to me in the normal course. I will sign it and hand it over to the secretarial department,”

He basically shows that he was not even fit to be an accounting clerk leave alone a CFO!!

Reference Links:

1. I didn’t pay much attention to balance sheet: Satyam CFO

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