Last week, Isabelle has written her blog about an audit at Bharti Airtel’s (the biggest telecom operator of India) which was ordered by the government. Apparently, it is not the only company where there were stated irregularities because India’s Department of Telecommunication (DoT) wants to put the five biggest telecom operators (including Bharti Airtel) of their country through an audit.
A federal audit panel is necessary to control if the companies had been swindling the government by misreporting revenues with a view to pay lower licence fees. For example, a company can account revenues with higher licence fees to services with lower licence fees to dodge taxes.
The companies concerned are Bharti Airtel, Reliance Communications, Bharat Sanchar Nigam Ltd, Tata Teleservices and Vodafone Essar.
The Comptroller and Auditor General of India (CAG) will audit the books for the last three financial years. Generally, the CAG only examines the books of government departments and state-run companies. But when there is a suspicion that a private company is swindling the government, CAG can control the books of the private company concerned.
Reliance Communications has already been under fire in December last year, when the special auditor showed that the company didn’t declared all revenues to government for the financial years 2006-07 and 2007-08. But the company said that the report was prejudiced.
According the DoT, the department has sent a letter to the companies in which was asked to supply the needed details to the CAG.
The spokesman of Tata Teleservices affirmed that the company get a letter from DoT and he said that they will supply the needed information. If needed, they are ready to assist the auditors. In contrast with Tata Teleservices, the other four companies were not reachable for a reaction.
Besides, if the CAG is not fulfilled with the results, it is willing to do an extra audit, the Economic Times reported last week.
I think it’s good that the CAG will do an extra audit, because if it’s true that (some) companies have paid less licence fees, it would be normal that they have to pay a fine.
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I share the opinion of Tine. If the results are not good enough, an extra audit by the CAG will be a good idea. We constantly hear about companies who commit fraud. So, something must be done to prevent such scandals! In my view, companies should be punished severely.
BeantwoordenVerwijderenAn extra audit can always be useful but it can bring more doubts if the assessment is different in comparison with the first. So I suggest that it would be better to do the second audit by another audit firm. Due to this there would be no longer doubts about the impartiality.
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