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'Satyam auditors should be punished'

It is the auditors' duty to verify the authenticity of information. Through due diligence, one can easily identify forged documents, if any.

Print Edition: February 19, 2009

The Satyam scam has raised worrying questions about the role of its auditors (Regulating the Regulators, 5 February). They blame the company for providing incorrect financial statements which led to a flawed audit report. This is an illogical argument. It is the auditors’ duty to verify the authenticity of information. Through due diligence, one can easily identify forged documents, if any. If auditors are found to be negligent in their duties, they should also be punished.
— M. Kumar, Delhi

Auditors must surely be brought to book if their complicity is established in a fraud. In India, they can be charged under the Companies Act and the Chartered Accountants Act. In the Satyam case, some partners of the company’s audit firm have been arrested. So it is clear that we do have a system to regulate the regulator.

The story on splitting insurance polices (Split your Life Insurance, 5 February) revealed a little-known fact that the premium of term plans shoots up over time, whereas that of an endowment plan falls. Please inform us about more such strategies.
Manisha Chettri, e-mail

We are glad that you liked the story. You can access other articles on costefficient investments at www.moneytoday.in.

I enjoyed reading your issue on tax (Your Guide to Tax Saving, 22 January). But I would like to point out an error. The amount payable by a male taxpayer with an annual income between Rs 3 lakh and Rs 5 lakh should be Rs 15,000+20% of the income above Rs 3 lakh, instead of Rs 12,000+20% of the income above Rs 3 lakh.
Kumar Mohan, e-mail

You are correct. The figure for male taxpayers in the Rs 3-5lakh income bracket should be Rs 15,000+20% of the income above Rs 3 lakh. For the Rs 5 lakh and above income group, the figure should be Rs 55,000+30% of the income above Rs 5 lakh. Thank you for pointing out the mistake.

Your story on tax (Your Guide to Tax Saving, 22 January) was very helpful as I was looking to invest in some tax-saving options. I was surprised to find that the ELSS, in which I have been investing for a year, qualifies for tax benefits. There were several nuggets that I picked from the story. Thank you.
P. Srivastava, e-mail

Many people are unsure about the tax efficiency of investments. Our story aimed to clarify doubts and act as a ready reckoner for tax planning.

CLARIFICATION
This refers to the story, How to Insure Returns, 5 February. We would like to add that for single premium insurance policies, if the premium paid in a financial year exceeds 20% of the sum assured, no tax benefit is available under Section 10 (10D) and Section 80C of the IT Act.

To Talk Back, email us at letters.moneytoday@intoday.com

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