PwC Auditors Arrested In Satyam Fraud Inquiry 158
theodp writes "Indian police arrested two employees from the affiliate of PricewaterhouseCoopers who audited Satyam Computer Services, the IT outsourcing giant at the center of the nation's largest fraud inquiry. The move comes after Satyam founder Ramalinga Raju said he had fabricated $1 billion of assets and confessed to making up more than 10,000 employees to siphon money from the software company. State Farm Insurance has severed its ties with Satyam, citing uncertainty about the company's future as 'the only factor responsible for the termination of the contract,' which will reportedly affect at least 400 on-site Satyam employees. Other customers, including GE, are standing by Satyam, one of the top recipients of H-1B and L visas (so much for those $500 Fraud Prevention and Detection fees!)."
Uh oh (Score:1, Interesting)
'Obstruction of justice'? Enron, anyone?
(I don't think it will come to that though, in part for good reason - but it's a tantalizing thought)
Great, more fuel to the flames (Score:4, Insightful)
As an East Indian, do these corporate assholes not realise the extent of their greed?
Due to the US Economy
1. Outsourcing is getting slashed as jobs need to to be retained on US soil.(rightfully so I guess)
2. Crap like above effing kills whatever reputation we have, there enough jokes flying around about the lack of quality or whatever from Indian work. This just made things worse.
Now this is not a flamebait, or troll post, I am not bashing my fellow Indians or the Americans/whoever.
I am however rightfully pissed at these corporate assholes who did this. There are folks who had purchased homes, property rates were rising, and now they'll plummet, people will be laid off.
Most of all, the company's name was Satyam (truth), and this came out of it. All of us Indians who work overseas have to deal with this in addition to the rest the usual crap.
To you effing lying executives, own up to your crap, you've put all of us in misery.
-Angry Brown Dude.
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Best wishes to you, Indian friend. May our two economies prosper and your standard of living dramatically increase.
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Well you might be pleased to know that your reputation amongst IT engineers is already shredded due to the sheer number of underqualified, incompetent IT 'professionals' who simply lie about what they know / do not know, and / or are pure paper test passers.
I have met many brilliant Indian IT techs, and for every one I meet, they have ten incompetent comrades (and I'm not talking about the language barrier).
Having been on both sides of the fence (i.e. lost my job to an Indian outsourcer, gained a fat short
Re:Great, more fuel to the flames (Score:5, Insightful)
The problem is that as a developing economy, a lot of people in tech in India took up engineering or IT because it is a great chance to make money.
While there were a few talented techs and a few people who loved tech for its own sake, the very attitude in that region is to study something that would get you a well paying job. Most families there push for engineering or medicine - maybe law or finance every once in a while. Doing anything else, immaterial of your where your talents and interests lie is looked down upon.
The end result is that for every talented person, there are a ton of others who have no clue whatsoever. This is made worse by corporate greed by the various outsourcing companies who just use folks with backgrounds in anything vaguely technical, "train" them in IT and get them to do the grunt work. These people do not understand technology, do not care for technology and are nothing more than grunt workers, every single one of them. Wipro? TCS? Infosys? Satyam? They are ALL the same.
IT in India is a joke. The vast majority of them have no clue, and worse yet, do not have a passion for what they do. The problem is endemic, and results in poor quality code, service and the worst of all - attitude.
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They may be grunt workers but are they really, when they earn 20x the wage of a factory worked (anecdotally told to me by my Indian colleagues when I was in Bangalore 2 years ago).
Good points about the sociological aspect, another thing I noticed immediately is that Indian IT is drawn from their upper class twit population i.e. those with enough money to have learnt English. I think that this, combined with the effects of the class system (ooh VIctorian England would be proud) to produce a perfect storm of
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Not entirely true. I've a lot of friends who studied anything from Classics to Art History to Philosophy who are quite gainfully employed, making 6 and 7 figure incomes. That's only possible in developed countries.
In a place like India, what and where you study has a much bigger bearing on how much you make and where you end up. More so than most countries.
Re:Great, more fuel to the flames (Score:5, Insightful)
None of the points you make are specific to India or any country for that matter. I don't want to start a flamewar but I have seen enough clueless non-Indian programmers who had obviously no passion and were doing the jobs just for the money.
Indian programmers take the blame as they are the most hated ones to offshoring and H-1B and there are a large number of them in that field. If you try to recruit a similar number of programmers in _any_ country you are likely going to end up saying "vast majority of them are crap" .
Acknowledging the problem is a good first start but blaming everything on Indian programmers and making highly generalized statements like "IT in India is a joke" doesn't help anything except may be making you feel better. In my experience though Indian guys lack the "self marketing" and most always do not go the extra mile to make the work "look" quality but otherwise the code does what it was asked to do. A little effort in those directions could go a long way.
On the other hand I get quite pissed by the programmers wanting to tout their work as quality and doing largely pointless rhetorical things in the name of differentiating - it adds little value.
Pick your poison - you pay less for one, more for other.
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Being a techie, is not something you learn at a later stage in your life, it's something you grow up to be. Most Indian IT workers, just don't "cut it".
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I wonder why this type of advert is never aimed at lawyers or accountants... I mean, how difficult can it be ? (to me a lawyer is just like someone in marketing, but that's another story...)
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to me a lawyer is just like someone in marketing, but that's another story
If it's so easy, why don't you go to law school and make the big bucks?
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not to count that defending criminals is not my style (although I do believe in justice - in principle), so I'll leave that to those who keep benefiting from it...
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because someone's patented the judicial system, and only those rich enough to afford it can actually access it...
Everyone in law school right now has student loans out the wazoo, you could join them easily enough.
not to count that defending criminals is not my style (although I do believe in justice - in principle), so I'll leave that to those who keep benefiting from it...
There's lots of boring law that you don't see on TV, corporate law, tax law, family law...
It's just like the dot-com boom (Score:5, Insightful)
What's going on in India right now is no different than what went on the US in the late 90's with the dot-com boom. During the boom, demand far, far outstripped supply so people who could barely *spell* HTML were being hired as web designers and 90% of them were incompetent.
Same thing is happening in India right now, with approximately the same results. I have a feeling that one of the fallouts of this global credit crunch is that, just like the eventual dot-BOMB in 2000 and 2001, India is going face a major market correction.
The bottom line is that this is not an "India" thing or a "US" thing. It's a basic Economics 101 thing. Let's try not to make it too personal.
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Exactly right, but there is another angle here: India has far less regulation, and US companies sending work there have far less insight into how their work is being done. Turns out that matters.
And still, this is not an India thing, it's a regulation vs. deregulation thing. The U.S. has been becoming steadily more deregulated and, predictably, steadily more corrupt over the last 8 years, and we know how that worked out.
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Couldn't agree with you more.
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The problem is that as a developing economy, a lot of people in tech in India took up engineering or IT because it is a great chance to make money.
That was the same a few years ago in the west. Almost all of the youngsters in my family took up IT classes just because they followed my example (I consider myself a valuable employee and I make quite a bit of money) and one of them is actually good at it, the other ones however have their knowledge only from playing games and whatever crap they teach in college
The problem is not in India. (Score:1, Insightful)
The problem is what all those geniuses managing companies in rich countries, those wonderful CEOs that don't know that when something sounds too good to be true most probably it is.
Companies in rich countries were offered this pool of people that would charge you peanuts for doing top tier work, so they outsourced full operations to teams of unexperienced and often overworked people.
The reality in Indina towns was and is very different. If all these people were in a place without companies, infrastructure a
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The best proof that rich countries' companies were far too gullible is that as soon as people in India and other poor localities become any good, they immidiately switch jobs or immigrate, demanding higher salaries that approach or meet rich countries' standards, so normally the people working outsourced or remotely for companies in rich countries are either relatively novices or not the brigthest spark since thay have not managed to move on to better jobs.
How much would you pay a slumdog to fix your spelling errors?
Re:Great, more fuel to the flames (Score:4, Insightful)
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Well as an outsider think of it this way, a few years back american employees were threatened by loosing their jobs to indian companies who basically did not promise quality just cheap work, do you expect that exactly those guys (often smart people who do not have a high but rather average income) expect you to welcome you with open arms?
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Well, I'm an Indian as well (albeit an Indian-American), and I am always amused when Indians chime into pretend that things are all fine and dandy in India. Or worse yet, when the same specious arguments (e.g. Bush) are brought up.
To think that education and skills are not commoditized in India is a joke. Except for the very top schools, most places offer next to nothing in the way of education.
Yes, there are incompetents in the US, but it is a lot harder for incompetents here to get a job at a top tech US
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I don't know how well it translates to english but... We have a saying "The guy who asks isn't stupid. The guy who pays is.". The reason for unqualified foreign labor isn't that people claim to be qualified/have qualified workers. Of course they do. It is because of we accept that with no evidence.
When I was still a project leader in one very large software and hardware company that we have all heard about, we rented 10 highly qualified Debian experts from India. And we paid quite well for them. It very qui
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The problem is management never likes being proven wrong. They don't like it when you point out that individual(s) xyz are just milking money from the company, even when you have clear evidence. I don't know how many times I've gotten into these such arguments with my bosses and seen nothing done about it. It's such a shame that the route for management is just having bodies to fill seats. There are a lot of qualified people in any given type of field you work in. Getting your bosses to recognize that, even
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My experience exactly. And THEN you toss the language/timezone barriers on top of it, and you have a real clusterfuck.
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You an remove the word "Indian" from the above statement and it's pretty much still going to be true.
Not to downplay language, timezone, cultural or attitude problems, but the #1 problem is that people are willing to pay for **** - as long as they don't have to pay too much for it - and there's no shortage of people willing to sell it. If customers ever started demanding quality, a lot of these losers would be looking for a new career.
Then again, what does it say that a big-name US auditing firm signed off
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As my dad (tech wizard from WAY back) used to say..."if you pay peanuts, you get monkeys".
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2) It's hard to figure out who can do the job, of the subset who WANT to. You could try to get some famous OSS coder to code for you, but he'll probably want a lot more money and he'll probably get bored and leave after a few months.
So given 1 and 2, it's no surprise bosses prefer to pay an Indian programmer to do a crap job, than to pay a US programmer many times more to do a crap job.
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Oh yes and explain to me why I see Indian CCNPs googling 'routing' and unable to answer simple queries re: spanning tree and OSPF.
That's OK. I used to work with a "I'm ccnp, but cisco lost my results, so I don't have the cert yet" NotWork engineer. Fucking lying bastard asshole. Set up a 10/8 flat network for 3000 people, 42 remote sites. Good ole white american.
What's my point? It's not the nationality or the outsourcing that is the issue, it's the damned incompetence.
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Umm, or you would just be a "social scientist." At least, what we call them in Academia. Of course, they (sometimes) get paod, so you;d have to drop the "amateur" moniker.
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Sometimes is the word. I do have an honours degree (first class lol) in political science, so I guess that does qualify me for a slashdot soapbox
guess why network engineering is how I earn my crust (hint: here in Oz at least 30% of any unemployment benefits queue holds an arts degree)
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Actually, as a TA you should also have the ability to bring it to the attention of the department if the professor doesn't do anything about it. Most engineering departments take a dim view of cheating. The one at my alma mater ended up uncovering cheating that had occurred a few years prior when a student was, I believe, researching a thesis.
He reported his findings, and the dept dug deeper. I think they ended up pulling the degrees from a few people.
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A lot of corporate types are clinically insane.
The film "The Corporation" goes into this. I've actually worked on the investigation of a CEO that went to prison-and it was incredible how much in lied to himself and those around him.
My favorite story was when he was walking out the door. This guy was facing prison time. He had lost a bunch of investors money. He had endangered the jobs of a lot of people that trusted him. Now, this might be considered a time for some introspection. Instead, on his way out th
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Stop acting like "5+ years experience" is Indian for "5 day training course", and maybe the jokes will stop.
Seriously. When I review resumes, I just don't even pay attention to that part anymore. It's pointless. I wish I could disqualify anyone I thought was lying, but that's hard to do when that would disqualify all the resumes on my desk.
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Best programmers (Score:2, Insightful)
...confessed to making up more than 10,000 employees to siphon money from the software company.
This must be what Brooks meant about the best programmers being 10 times more productive.
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Please hold... (Score:5, Funny)
Press 1 if you'd like you're information stolen, 2 if you'd like to participate in a pyramid scheme, 3 if you would like to speak directly to a lawyer.
Thank you.
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OK I'm having a really bad day.....and after reading this, it got a lot better, this is one of the best comments I've seen lately
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Press 1 if you'd like you're information stolen,
Press 4 if you want to correct the grammar of this message.
*beep*
It's "your" (~ my), not "you're" (~ I'm).
*beep*
Thank you for your correction. Press 1 if you'd like ...
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GE Comment Misleading (Score:1, Informative)
I work for GE. GE is hardly standing by Satyam. We need proof of breach of contract before we can legally severe ties. Give the lawyers a bit of time and it will happen.
Let's check the sympathy meter (Score:5, Insightful)
Indian police arrested two employees from the affiliate of PricewaterhouseCoopers who audited Satyam Computer Services, the IT outsourcing giant at the center of the nation's largest fraud inquiry.
Let's see, companies ship thousands of jobs to places that don't have the reporting and oversight capabilities we have here (or at least used to have) and are outside the jurisdiction of US courts in order to save a few bucks at the expense of several thousand local employees. They deal with the language barrier, the cost of travel, a culture where bribery can be a way of life, and time zone issues. Then said companies get taken to the cleaners because they can't audit their operations on that side of the world properly.
Hmmmm, let me be the first to say HA-HA! I guess we need new batteries in the sympathy meter because it's showing a big, fat ZERO right now.
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I guess we need new batteries in the sympathy meter because it's showing a big, fat ZERO right now.
<smartass>If the situation this hypothetical sympathy meter was measuring was as you implied, it would read zero even if there *were* batteries in it. :)</smartass>
Re:Let's check the sympathy meter (Score:5, Insightful)
"Let's see, companies ship thousands of jobs to places that don't have the reporting and oversight capabilities we have here (or at least used to have) and are outside the jurisdiction of US courts in order to save a few bucks at the expense of several thousand local employees"
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Yeah sure. Enron was an Indian firm. So was Lehmann. How exactly did the US jurisdictions and having the reporting and oversight prevent them from happening ?
Then said companies get taken to the cleaners because they can't audit their operations on that side of the world properly.
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In case you missed the TFA, PwC is from your side of the world, and are complicit in the fraud. Here in India, we have a proverb, which roughly translates to "When you point a finger at someone, 3 of your fingers point to you"
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One of us missed something for sure because the article says they were arrested by Indian police in India. And that the auditors were a local subsidiary of PwC, well outside of US jurisdiction.
Enron was an Indian firm. So was Lehmann. How exactly did the US jurisdictions and having the reporting and oversight prevent them from happening ?
That's our problem, now isn't it? One could point to the recent elections and suggest that there is some unhappiness with the regulatory climate on this side of the
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And that the auditors were a local subsidiary of PwC, well outside of US jurisdiction.
AFAIK, a US firm is responsible for ethical conduct irrespective of the country it operates in. For example, if your US firm's subsidiary bribes an Indian official , US courts have jurisdiction over the parent company in the matter
If something goes south we can take them to court, but short of that I can drive over to their office and find out for myself what's going on. Not so easy to do if your vendor is in Bangla
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> a culture where bribery can be a way of life
I hate to break it to you, but there are places where that's true in the U.S., too. There are places where it's difficult to impossible to get a water meter put in or a building plan approved without bribery. Doing it legally makes you the exception rather than the rule, it takes months or years longer to get it done, and you've got a good chance at being rejected on spurious grounds.
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What's wrong with this analogy?
Lets see - FOSS developers are doing something totally legal and ethical that benefits many other people, and even offers some benefits to the laid off Microsoft employee if he or she can still afford to use a computer. Hate them if you must, but it's like being a buggy whip maker who hates the inventors of that new-fangled horseless carriage.
Illegal downloaders inflict damage to a company's bottom line in at least some cases, but laid off employees are there because of that,
H1B Fraud? (Score:5, Insightful)
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I see none either.. He does get some marks from me for mentioning the facts (I didn't know about the $500 fee), but totally loses them for saying there is visa fraud when this is not what it is about.. Now if he said something to the effect of "I hope someone looks into the visa aspects of the company because falsifying employees doesn't give me good feelings about them" that would be ok.. but to imply that visa fraud exists because they are guilty of one crime so must be guilty of the other is not accurate
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I met my wife when I was living in Australia. We decided that I'd move to the US, and begun going through the proper channels, filing for a fiancee
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We worked out that it would be a CHEAPER, AND FASTER, process, if I had come here as a tourist, breach my visa and marry my wife, apply for permission to stay anyway. What fun.
Know what you mean - my ex-wife is an Aussie (Melbourne area), came here on the usual tourist visa waiver for short visits, and stayed most of that time with me. About a week before she was supposed to go home, we decided to marry, so down to the courthouse we went. It was a long while before we got her residency, but that had more
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We worked out that it would be a CHEAPER, AND FASTER, process, if I had come here as a tourist, breach my visa and marry my wife, apply for permission to stay anyway. What fun.
That's really no surprise - the legal system here considers the "crime" of over-staying a tourist visa as roughly on the level of jaywalking. Few people would expect that a single case of jaywalking should impact that ability to get a driver's license. Same sort of thing is going on here with immigration, it is just easier to do whether you are validly in country or not.
The thing to remember is that you came from australia, if you had come from one of the countries from which there are a large surplus of
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A more interesting recent event on H1B Visas are the layoffs announced at Microsoft. I think Congressmen Waxman used those layoffs to call in to question Microsoft's constant demands for more H1B visas. Like why do you need more H1B visas now that you are laying off your U.S. staff. I think he is also interested to know what the ratio of American citizens to H1B visa holders will be in the layoffs.
The irony (Score:5, Insightful)
I can't believe... (Score:5, Funny)
Re:I can't believe... (Score:4, Funny)
What is important about PWC (Score:4, Interesting)
These folks are virtually a privatized branch of government. The US elites depend on companies like PWC to understand what is going on in big organizations. If PWC is compromised, that means the US elites are effectively flying blind.
Now, personally I think use of H-1b workers for critical financial infrastructure is stupid. It is impossible for an American to do a good background check on someone in/from India.
Nobody really knows how they will react when they have a chance to steal millions of dollars. Putting a young guy far from home into the position where he can do that-and the costs are born by citizens of a country he may not identify much with isn't doing that country or the young guy any favor.
What are you on about? (Score:2)
Who is this guy who is far away from home & has a chance to steal millions of dollars?
In this particular story?
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Lots of folks managing stuff like systems that handle credit card data, insurance data have those kinds of options. There are also niches of that type in companies like Microsoft and Cisco-which are both heavy users of H-1b visas-and the various big financial firms and accounting firms.
I've worked both on a credit card fraud detection system and in an investigation of a crooked insurance company CEO that involve PWC doing the audit(kind of a mini-enron). I'm not saying that all H-1b visas are being used in
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What the fuck are you smoking, and would you like to share it?
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As a result (or just laziness) the reporting standards in India are lax even compared to pre-Enron USA. You can fit in a whole quarterly report in less than 10 pages ( here [bseindia.com] for example ).
This fraud by Satyam is the perfect storm - it involves largely foreign held comp
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"I hope this provides an impetus for India to adopt something like Sarbanes-Oxley."
A lot of good Sarbanes Oxley did. It didn't even put a dent in all the creative off balance sheet vehicles that have destroyed AIG, all but two of the major investment banks and may still take down Citi, BofA and JP Morgan. It didn't do a thing to stop John Thain from hoodwinking BofA in to buying Merrill Lynch and then forgetting to tell them about the extra $15 billion in losses. Not sure if its true but I recently read
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Corruption in general is very much part of south Asian culture. I would suggest taking a look at Transparency International's Corruption Perception Index [wikipedia.org]. I don't think that the security mechanisms companies like PWC are used to are really applicable in a difficult situation like India. I'm not saying that all Indians are corrupt. I'm saying that there is enough of this sort of thing that it is a VERY different problem than dealing with Americans-which is hard enough.
From a Satyam Employee (Score:4, Informative)
I happen to be a Satyam employee and let me give you a clear picture on this entire story till now
1. Investigation is still going on the details of the fraud. There is still no clue on the missing cash and where did it go. The current numbers are just from the arrested's (Raju, Founder) mouth which cannot be trusted.
2. Within 5 days of scam the govt had stepped in. appointed new directors. Directors appointed audit and 2 new accounting firms to do complete audit of company from 2001. The 8 week audit will give a clear picture of the fraud numbers.
They are also hunting for new CEO and CFO. Even in US corporates are happy the way indian govt and intervened.
3. US employees have been paid their Jan month Salary. Indian employees wait for theirs and it will be announced next week (In India we get have monthly pay cycle)
4. The founder and his brother and CFO were arrested in 4 days after founder confessed to the scam. He is in an ordinary Jail along with his bro and CFO. Multiple agencies: SEBI, CID, CB-CID, CBI are investigating the case.
5. The lack of 10K employees is a baseless argument. Its currently under investigation though. One of the directors has also agreed that the 53K employee strength is true (http://www.thehindubusinessline.com/2009/01/26/stories/2009012651330100.htm)
6. Satyam like TCS, WIPRO, Infosys and other multitude companies operate on the outsourcing model. The working culture, people, environment and pay scale is extremely well compared to other indian jobs. Due to this indians are very professional, well mannered and living a better lifestyle. They have absorbed the american culture completely. Indian IT also has reflected into other industries with better pays and more professionalism and higher ambitions which is fueling india's growth.
This FSCK up is due to a bunch of family greed.
7. Many clients have shown support. They have personally called up project teams and shown support. People working on projects are continuing with their deliverables though the morale has fallen a little.
8. We have daily global calls where the entire company is addressed with the progress of company's future.
9. There are tons and tons of rumors flying around. I would suggest to wait and watch few weeks till all the investigation results comes out.
Re:fp (Score:5, Informative)
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One problem is that traditional audits really don't work very well as a rule. There are too many ways of beating an audit and the cost of an audit often is greater than the stealing it reveals.
It is hard to believe that companies that exist to sell auditing service are not well aware of these problems and therefore sort of corrupt in general as they often are not offering a reality based service.
Re: Of course this is an INDIAN company (Score:5, Insightful)
Re:fp (Score:4, Informative)
PricewaterhouseCoopers is not actually a company. They are a network of partnerships across the globe that utilize each other to perform global audits. Just because one office is crooked doesn't mean that it is true in another office, as each one is managed by a separate partner who makes their own choices regarding how to run the office (in this case crooked as hell).
Re: PWC the next Author Anderson? (Score:2, Insightful)
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Pricewaterhouse Coopers is a huge company and actually audits 40 percent of companies in the FTSE 100 Index.
Yepp, Pricewaterhouse Coopers is one of the Big Four: http://en.wikipedia.org/wiki/Big_Four_auditors [wikipedia.org]., one of the best, without question.
But in these matters, I tend to wonder if the auditors are in cahoots with the company that they are supposed to br auditing.
On another note, an executive once told me: "I can't steal $100 from my company. We have enough controls in place to detect that. Now, $100,000,000, you can do that, and nobody would notice."
At "The Economist" quipped on the Bernard Madoff c
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Our auditors lack basic understanding of IT process and technology let alone security. The stupid and basic things I get asked by our auditors amazes me. I have no doubt that I could perform any action in our IT systems without them having a clue what was going on.
Your auditors may be fools, or they may be finding out who the clever people are.
If they ask about a process and you show them standardized documentation then you pass the test.
If you do anything else you do not pass the test.
If there is no standardized documentation then the company does not pass the test.
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Alternatively, a lot of auditors that I've met have only a rudimentary understanding of computer systems.
They understand some, but, the same way as most people in computers would have to have GAAP or IFRS explained to them, auditors might need someone to explain Caching, Access controls, etc. to THEM.
Don't equate foolishness with ignorance. The first you might be able to put something over on, the second might know something is being done that shouldn't, even if they are not sure what.
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We need a world-wide currency, world-wide wages, world-wide costs for raw materials, etc. Until then, it's always going to be fucked-up.
Wouldn't it be nice if we were all the same, and some world-wide authority to make sure none of us broke that golden rule.
Unless you plan on normalizing climate and remaking Pangaea, things will always have different costs in different countries. Japan will never have herds of free-range cattle; beef will always be more expensive there. Housing will never cost as much
Re:Only one way out of this mess (Score:5, Interesting)
There are differences in the real costs of some things. The problem is exchange rate differences. That is, work 40 hours in place A and you can live for a week there or then take that cash and live for a month in area B. Do that same 40 hours of work in area B and you can't even live for a day in area A.
The problem comes in because it's much easier to move a job overseas where labor is cheap than it is to move oneself overseas to where jobs exist.
Were the exchange rates equalized out, beef in Japan would still be more expensive due to shipping costs and houses in the middle of nowhere would still be cheaper, but there would be nowhere near the differences we see now between labor and living costs in (for example) New York and Mumbai.
In turn, that would lead to greater efficiencies overall. A pair of shoes takes X hours of human labor no matter where that labor happens. Currently it happens far away from the market they're sold in and then they get shipped halfway around the world. Were things equalized, they would still require X hours of labor but would only be shipped 1000 miles over land (much less resource intensive).
Economy is supposed to serve the people, not the other way around.
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I can't believe someone with a 4 digit number can have such a stupid idea. The reason why there's disparities is because of scarcity of resources. For something like what you're suggesting to work, would mean that everyone has access to the same level of lifestyle. This is so far from true. At one point, one of my professors told me that the US consumes 70% of the world's resources. We definitely use a shitload of energy compared to the rest of the world.
How are you proposing to to raise the level of l
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Gee, since you called my idea STUPID, you must be a genus! I was Sooooo WRONG I think I'll nip off and kill myself now...
So, sarcasm aside, I fully realize that theres more than waving a magic wand involved, I just didn't have a month to prepare a proper scholarly work on the subject. Instead, I merely pointed at one point of attack for the problem. Unfortunately, that would involve extremely difficult things like putting an and to profiteering dictators constantly tearing societies there apart for their pe
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You do realize why the labor is cheap right? Because they have a lower standard of living, comparably, to western worlds. Which is why you don't outsource your factories to Europe or Japan.
If you start taxing them to make the labor cost equivalent to the western society, you just fucked them over - how the hell are they supposed to improve their standard of living?
And before you give me any grief about well, life sucks for them, remember, the west have been exploiting the rest of the world for cheap resou
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There's more to it than that. Even living at their standard of living here in the U.S. would cost more than it does there.
Also note that I suggested quadrupling their wages (still cheaper than paying for western labor) as a way to speed up the equalization. As an alternative I suggested direct taxation of foreign labor with the proceeds used to develop their economies.
But your right. If we just sit and do nothing it will surely be fixed by deus ex machina. Doing nothing always helps!
Re:Only one way out of this mess (Score:5, Informative)
Having multiple currencies with floating exchange markets has a very, very important advantage: it helps to moderate the impact of inflation in one country on trading partners.
If you choose to have a single currency, you need to set a single supply regime. But what happens if one part of your economy needs cheap and easy money because it's stagnating, while another part needs its money supply tightened to avoid runaway inflation? It can't be done, you're screwed both ways.
Australia had this recently in the gap between New South Wales, the most populated state, which was stagnant, and Western Australia, much more lightly populated but in the midst of a mining boom. Our Reserve Bank chose to fight inflation. Now they're fighting recession. But either way the impact of their policies is uneven within a single currency.
The EU has a similar problem in the Eurozone. What is good for Germany can be bad for Spain, what is good for Greece can be terrible for France. With floating currencies each country can determine its own settings and the market will, more or less, adjust for it.
Of course the total dominance of the US Dollar means that we're all affected by Federal Reserve policy whether we like it or not, but some of the effect is soaked up in exchange rates. Until the crisis hit and everyone fled for US Treasury bonds, the US dollar was falling like a stone because it was too abundantly created by the Fed, which was driving up other currencies. The inflation in prices for US goods was offset by the increase in the price of other currencies.
The above analysis roughly holds in normal conditions. But these aren't normal conditions.
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So then why doesn't each city have it's own currency? Or each industry within the city? Playing with exchange rates is a very blunt instrument to solve a fine grained problem. Often manipulation of exchange rates is done rather than using a more appropriate fine grained approach primarily as a way to deny manipulation of the market.
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The Continuum is a river whose current flows from those who want to those who have. According to this concept, there is a finite amount of wealth and goods in the universe, and any goods taken from one part of the "river" must be appropriately replaced or paid for by other methods. Thus, one must be sufficiently knowledgeable of the wants and needs of others to properly conduct business; a Ferengi sufficiently skilled at navigating this continuum will certainly prosper and amass great wealth and power.
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How about you take your Fucked up NWO ideas and move to China. Oh wiat you sound like a Bildeburger plant - Now we have outed you!
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How about you take your Fucked up NWO ideas and move to China. Oh wiat you sound like a Bildeburger plant - Now we have outed you!
Hell, yeah. Those creepy secretive fucks are trying to influence world opinion by posting AC comments on Slashdot!
About the only plausible conspiracy surrounding this comment is that it's a setup to make NWO types look stupid. Or maybe it's a setup by the NWO types to make the anti-NWO types look like the kind of people who'd set up a poor quality fake to knock it down. Or maybe it's.... ah, sod it.
Oh wiat you sound like a Bildeburger plant
Is that a plant that grows Bildeburgers? I want one of those!
<homer>Mmm..... Bilde burger....</ho
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We need a world-wide currency, world-wide wages, world-wide costs for raw materials, etc.
We're already better than that. We have several competing world-wide currencies: the US Dollar, the Euro, the Renembli. Slavery is almost universally outlawed so we have everyone getting paid for their work, hence, we have world-wide wages. And of course, extracting raw materials costs something so we get world-wide costs for raw materials.
And don't tell me that it doesn't matter if the guy in China only gets paid US$100 per month since his rent is US$50, because the problem here is imports/exports and local wages vs your own country's wages.
Who in the world would make an argument like that? Besides it's more than import/exports and local wages. Someone in China making $100 per month just isn't doing valuable
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$100 per month isn't doing valuable labor?
Depends on how many units (and of what) he's assembling eh?
Looking at a wage-rate as a summation of the valuableness of
a worker (or productivity-rate) is a *horrible* assumption,
even here in the USA.
You are an idiot. (Score:2)
Wage is the value of the labor by definition. The value of something is what you can get for it. Duh!
To assume otherwise is to assume the market for labor is not working. Granting there are places where it is broken, rich kids and minimum wage earners are both overpaid for what they do.
$100/month is a very poor wage even for China. If they had valuable work to do they would find someone to pay them more.
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BTW - your definition of value is the same as "mark-to-market" LOOK that one up ;)
Yes. That is my definition of value. And I'm not so sure that Mr. Buffet would disagree with me.
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The original poster was calling for some silly stuff. A "world-wide currency"? As I note, we have a number of world-wide currencies. "World-wide wages"? Huh? I gather he meant some sort of common global minimum wage, which would be complete nonsense since it would mean either meaningless wage floors in the Developed world, or massive unemployment in the rest of the World. If instead the minimum wage in question is tailored to the circumstances of the region, then it's not a global minimum wage. Besides what
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we have both of those already.
Except for the massive unemployment and I'm not supporting a "family" on a minimum job.
LORD. Yer landlord outsources said importation of Chinese workers for free (re: landscaping companies all use either illegal labor or recently legalized temporary labor)
But why do that when we can have our own employee for the whole month? Mow lawns, fix up the house, cook food, fetch the mail, wash the cars, etc.
-- A market does that efficiently - everbody parrots that, nobody actually proves that statement.
There's a simpler explanation. You ignore the evidence. Markets are everywhere. You get more than a few people together who have stuff and need other stuff, then markets spontaneous crop up. There's millennia of history here. Markets are a natural, efficient social mechanism for