ECONOMIC OBSERVER The control system must be supplemented by regular conduct of audit — both internal and external — in order to independently evaluate the control system. Auditing in banks, therefore, is not only a requirement but also an area to ensure the emergence of a vibrant banking system with the inherent strength and abilities to perform. As of now, there are many regulations that control the functioning of financial organizations. Auditing is thus treated as an inevitable process so as to ensure compliance with the legalities present. Therefore, it is imperative to learn bank audit, evaluation of internal control, audit of the bank’s financial statements, long-form audit report, statutory bank audit, concurrent audit, revenue audit, information system audit etc. Auditors — mostly chartered accountants — are well recognized. This profession has a strong sense of ethics, and a large number of people and organizations depend on that profession. Being a well groomed and strongly professional group, the service is recognized all over the world wherever audit practices are followed, while the clients are advised on new horizons of critical and lateral thinking. T he auditor has to follow laid-down procedures However, audit should not be confined to financial audit alone. In fact, the arena of operation of audit is a wide one, and areas like review of cost, operations, efficiency, management and tax liability also fall under the purview of audit. An auditor, as such, is primarily concerned with items which, whether individually or as a group, are material in relation to the affairs of an enterprise — that is to say, material items which might influence the decision-making process of the ultimate user of the financial statements. In the absence of any definite standard to judge materiality, the auditor has to necessarily make a decision about the same on the basis of his professional expertise/judgment/prudence. and qualities. The job of the auditor is not fault-finding, but fact-finding. Detection of errors and fraud — being an integral part of auditing — should be unbiased. The auditor has to satisfy himself about their correctness, accuracy and authenticity, and submit his report accordingly. To quote Howard Steller in this regard, “independence is also an attitude of mind, and independent thought and action are equally as important as the independent relationship between the accountant and his client”. It is quite essential for auditors to maintain their independence and only to accept or continue a professional appointment if they are satisfied that to do so does not reflect adversely upon their integrity and objectivity in relation to that appointment. Clearly, an auditor should approach his work independently and be free from bias and prejudice. If there is any constraint which impairs the auditor’s ability to express an unqualified opinion on financial statements, he should set them out in his report and render a qualified opinion or a disclaimer of opinion, as deemed fit and proper. The job of auditing as performed by an independent person or body of persons qualified for the job should report duly reflecting the financial health of business by thoroughly going through vouchers, documents, information and related evidence (internal or external). Profit and loss account and balance sheet of an enterprise — general purpose financial statements —are certified by the auditor. Thus an audit report presents a true and fair picture of operating results and degree of financial strength of the organization. Which means an audit exercise should adequately cover all aspects of the enterprise which are relevant to the financial statements under audit. |
Will the Political Leadership be Found Wanting? C. Uday Bhaskar The multiple terror attacks that struck the national capital on September 13 is the fifth such lethal attack since May this year. In the last four months, Jaipur, Bangalore and Ahmedabad within the country and the Indian embassy in Kabul have been targeted. This begs the obvious question: Is the Indian state unable or unwilling to prevent such attacks and protect its citizens? The related issue is: What is the way ahead in a robust democracy that otherwise sees itself as an emerging major power in the Asian and global grid? India is no stranger to determined terrorist attacks. This scourge crossed the median in the mid 1980s with considerable support from across the border, namely, Pakistan. In the intervening years, some parts of India were more terror-prone — as for instance Punjab and later Jammu and Kashmir. The perception was that some ‘misguided’ local groups with specific political and sub-national agendas were stoking separatism. It was evident that this internal security challenge was being actively supported from across the border — hence the acronym SST — or state-sponsored terrorism. Over the years it was assumed that India’s major internal security challenge was SST and that if Pakistan could be prevailed upon, or compelled to desist from stoking such anti-Indian fervour, the challenge could be managed. The Kargil war of 1999 highlighted the inflexible mindset in Islamabad. A detailed report after the war — the Kargil Review Committee (KRC) — provided the Indian leadership a reasonably comprehensive blueprint about various security challenges confronting India. The linkages between internal security, the external factor and the need to radically re-vamp existing intelligence procedures were all illuminated. On the basis of this effort, the NDA government set up a Group of Ministers (GOM) who made wide-ranging recommendations among which internal security was also listed. However, there has been little by way of actual implementation in this domain. Consequently many of the major structural changes that are warranted to enable the Indian security system to address a complex internal security challenge spectrum remain still-born or effete. The post-9/11 regional ambience that has witnessed the birth of a scattered but potent radical group that has distorted the tenets of Islam to embark upon a jihad has compounded the problem for India. Within the country, the fallout of the Babri Masjid episode and the 2002 Godhra carnage has served to stoke a sense of injustice and persecution among sections of Indian Muslims. There were sporadic incidents of terrorism and many pre-emptive arrests that pointed to an emerging pattern of domestic radicalism with attendant political linkages. But it was perceived that this was not a major problem and that India’s primary internal security challenge was SST, with Pakistan as the locus. Hence there was little concerted action to address the domestic context. The manner in which the anti-terror legislation had become a political football among the major parties is a case in point. Pandering to majoritarian sub-nationalism and appeasement of the minority community over the years has allowed a subterranean extremist malignancy to take root. The entire internal security edifice that includes policing, intelligence gathering and assessment, investigation and judicial prosecution remains half-hearted. In short, professional ineptitude and political turpitude across the board have contributed in no small measure to the current sense of vulnerability and helplessness in the face of determined jihadi terrorism. The Delhi attack and those that preceded it should serve as a wake-up call. There exists today a tiny but ruthless minority within the country that has decided to distort religion and engage in a jihad by targeting innocent citizens and soft targets. It merits repetition that in India, patriotism and anti-national ideologies are not religion-specific. Exemplars at either end of the spectrum — patriotic martyr and murderous terrorist — can be found in all faiths. The challenge is to identify the individuals and groups that have embarked upon this path of blood and gore and apply the law without fear or favour — such that it acts as a deterrent and restores the credibility of Indian democracy. Here the elite of the Indian state, including its political representatives and the senior bureaucracy tasked with internal security, must engage in rigorous and objective soul-searching to arrive at the appropriate redressal of the many inadequacies in the prevailing scenario. Setting up a blue ribbon commission of eminent persons who can conduct a holistic review of the internal security situation in the country and a detailed stock-taking of the many reports and police commissions that have been set up will be a useful starting point. (The writer is a well-known strategic analyst) (IANS) source: sentinel assam editorial 23.09.08 |
Al Qaeda in India Adni The terror outfit Al Qaeda considers India “an ideal ground” and a suitable target for proliferation of its ideology and conducting terrorist operations. This has been revealed in a research paper prepared by Brig (retd) Rahul K Bhonsle for the New Delhi-based Centre for Land Warfare Studies (CLAWS). According to the paper, the outfit uses religion as a tool to foster political goals for its organizational proliferation. Maj Gen (retd) Afsir Karim (Retd) calls this strategy as Al Qaedism. Comforming this trend, India’s National Security Adviser (NSA) MK Narayanan says, “Today, the Al Qaeda’s mindset provides the most pervasive threat to Asian and international stability.” India’s large Muslim population and perceived sense of inequity has been heightened from time to time due to communal rioting, most notably in Mumbai in 1993 and Gujarat in 2002. Outlining the strategy of the terror outfit, the paper says that the Al Qaeda operates in South Asia and Afghanistan through its bases in FATA and NWFP in Pakistan, while operations in India are outsourced to affiliated groups operating in the country. However, opinion in India over the presence of the Al Qaeda was divided. The intelligence community led by the National Security Adviser, Mr Narayanan, believes in the existence of various strands of the organization in the country. The NSA was reported to have stated in a conference of the police chiefs in New Delhi on October 3 last year that the Al Qaeda posed a threat to India. Some liberals, on the other hand, strongly opposed this point of view. The groups to whom operations in India are sub-allotted by Al Qaeda, primarily include the Harkat-ul-Mujahideen (HuM), Harkat-ul-Jihadi Islam (HUJI), Jaish-e-Mohammad (JeM) and Lashkar-e-Taiyyeba (LeT), along with its political wing, Jamaat-ud-Dawa. The HuM, HUJI, LeT and JeM are members of the International Islamic Front (IIF) which is led by Osama Bin Laden, and have been under his influence since the 1990s. These are all based in Pakistan and support the militancy in Kashmir. The linkage was also through the common ideology of these groups with the Al Qaeda. The Harkat-ul-Ansar, a group which was formed with the merger of the HuM and HUJI, is linked with Osama. The HUJI’s Bangladesh arm, commonly known as the HUJI (B), which was implicated in the Mecca Masjid blast in May 2007 in India and the subsequent Gokul Chaat mayhem, both in Hyderabad, is also a member of the International Islamic Front. There were also personal linkages between the leadership, with Osama having close relations with Harkat leaders such as Fazl-ur-Rehman Khalil. Mullah Masood Azhar, head of the JeM, a breakaway faction of the Harkat, was regarded as a close associate of Osama and Mullah Omar, the Taliban chief. The JeM was the second most active terrorist organization in Kashmir and was also active in other parts of India. A recent report indicated that three JeM operatives were plotting to kidnap a prominent Indian political leader, with a view to facilitate the release of 42 hard core terrorists lodged in Indian jails. Some reports indicated that Rahul Gandhi, scion of India’s first political family, the Nehru-Gandhi family, was the most likely victim. The Al Qaeda operates with far greater sophistication and is today said to be bolstered by retired Pakistan Army officers, though this report needs to be confirmed. |
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Tuesday, September 23, 2008
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