The Hindu Business Line : When a handful shows more stones than rice

WHEN there is a difference between debits and credits, create a suspense account. That is a standard procedure, as all bookkeepers know, and when mysteries get unravelled fully, the amount is expected to dissolve into zilch. Yet, what may never usually leap out of the books are the full truths behind most vouchers.

Thus, when a boss needs to pass off personal expenditure as company's, he needs to have an one-to-one conversation with his accountant who knows the chart of accounts upside down.

As a believable joke goes, when the MD's pop popped off, the steep funeral outflow got booked as `packing and forwarding', while expense of pompous wedding reception of owner's daughter went sneaking into employee welfare account. If government cars can be idling with air-conditioning on outside jewellery, awaiting the sahib's wife to emerge from shopping anytime, or T&D losses in power transmission are better known as theft and dacoity, what we have as benchmark is akin to a handful of rice where stones outnumber the edible grain.

"Cheating has risen in the last two decades," writes David Callahan in The Cheating Culture, published by Harcourt (www.HarcourtBooks.com). "Corporate scandals, doping in sports, plagiarism by journalists and students. Even ministries have been caught stealing sermons off the Internet. Why all the cheating? And why now?"

Who is to blame? The author is of the view that the `dog-eat-dog economic climate' is responsible for the emergence of the `Winning Class' that has enough of everything to engage in the cheating game, "while an Anxious Class believes that choosing not to cheat could cost them their only shot at success in a winner-take-all world."

Equal opportunity is a myth in the context of `unfettered market' that has `corroded our values'. Only the subtitle is limiting: "Why more Americans are doing wrong to get ahead." Is the author underplaying the problem that has global ramifications? Perhaps, we have taken many things he talks about for granted, while he doesn't seem to.

Thus, Callahan writes on "the varied forms of overbilling" in law practice: "Beyond the simple padding of hours, law firms engage in other abuses: overstaffing, by putting four or five lawyers on a project when two or three would suffice; overloading, by doing unnecessary work for a client; and over-qualifying, by assigning partners at a premium rate to jobs that associates can handle."

Accountants are no paragons of virtue in comparison.

It is a sage remark that cheating is a question of character. "We don't decide whether to cut corners based on a rational calculus about potential gains and losses," says the book. "We filter these decisions through our value systems... This is one trait that distinguishes flesh-and-blood Homo sapiens from that consistently rational actor of academic theory, Homo economicus."

Values are but shifting icebergs. If you were to take a survey among the working young, and tabulate the results, findings would be on predictable lines: that financial goals are more important than the human ones. "Swimming pools and vacation homes" may be rated better than "having a happy marriage or an interesting job."

Now that we know what we have lost, do we need to get a few pickaxes and shovels to rediscover the old values? "We need to create a new social contract," writes Callahan, ambitiously, aiming to tackle the `root causes'. His solution would need a tamed free market, that balances between humanistic and market values.

Deterrent punishments, ethics classes in B-schools, value education by parents and so forth can help in checking the cheating virus. For something more foolproof, we may need to turn to genetic engineering.

BooksOfAccount@thehindu.co.in

More Stories on : Accountancy | Books | Books of Account

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Local standards are very foreign to CAs

Oil anxiety

Short credits in long sentences

When a handful shows more stones than rice

Accounting is too serious a job for part-timers

Sixteen going on accoun-teen!

Forex market: The Indian script

Nuclear weapons and Kashmir — A composite dialogue with Pakistan

Keeping the word

Cotton price

ONGC shares