Podcast Episode 89 Why do we need an ICGI? For Accounting to Accountability
7.02 Why we need ICGI – Accounting.mp3
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Podcast Episode 89 Why do we need an ICGI? For Accounting to Accountability
Why do we need ICGI? For Accounting to Accountability
Here are 5 key points summarized from the transcript: 1. The Institute of Corporate Governance of India (ICGI) is needed to move from accounting towards accountability in corporate governance. 2. Cowrie shells were widely used as currency across many regions, including India, from ancient times until around World War I. 3. Modern accounting practices evolved from simple shopkeeper ledgers to more complex systems as businesses grew larger, but the core principles remained transactional. 4. The role of a modern Chief Financial Officer (CFO) is compared to that of a “Gumazda” (accountant) from 2,000 years ago, suggesting that accounting fundamentals have not changed significantly. 5. The transition from cowrie shells to modern currencies took a long time, with attempts to introduce alternatives (like copper coins) often failing to displace cowrie shells initially.
Regards
Jayaraman
#thorheyerdahl, #icgi, #maldives,
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Podcast Episode 88 Why do we need an ICGI – The Institute of Corporate Governance of India?
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Podcast Episode 88 Why do we need an ICGI – The Institute of Corporate Governance of India?
My mission is to establish the Institute of Corporate Governance of India. Why do we need that? Why do we need. That is a good question.
Because why else DOGE is there in United States, USAID, any number of rules, all that, but we are not able to find out to justify the conduct of the people who have been entrusted with everything. So that’s the reason why the rules express the truth and justify the conduct. That is the ethics.
That ethics is the outcome of ethics as a knowledge base. The knowledge base of who conducts how individuals conduct themselves in a company or the government is the most important factor. That is what is being needed.
That is the need. That is how it is being found out from ICGI. Establishing ICGI based on science.
Regards
Jayaraman
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Podcast Episode 87 Mission Corporate Governance – ICGI – Status Report 17 Feb 2025
ICGI Mission Status and Report.mp3
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Podcast Episode 87 Mission Corporate Governance – ICGI – Status Report 17 Feb 2025M
My mission is to bring in the Institute of Corporate Governance of India under an Act of Parliament. That’s my mission and I have been writing to the Prime Minister, the Finance Minister and the Home Minister. I am very happy about it. Happy in the sense they are the people who govern the country and they have taken my information and have responded very well in terms of sending it to some of the other departments of the government as well as providing me with a status number so that I can always go back.
The interest that they have shown in the Corporate Governance that is, going from accounting to accountability is a very important factor and that is the status as on today. How we eventually come to a fruitful conclusion as the Institute of Corporate Governance of India a separate independent institute is what this status report brings to fore.
My objective is to bring the Institute of Corporate Governance of India under an Act of Parliament. There is a need for it. That is my emphasis.
I have explained a lot of things. So I’m very happy about the Prime Minister, the Finance Minister and the Home Minister to have listened to me so far. My request is that do not leave this ICGI and it is very important.
Here are 5 key points summarizing the transcript: 1. The main mission is to establish the Institute of Corporate Governance of India (ICGI) as an act of Parliament, emphasizing its importance for improving corporate accountability.
2. Two critical areas of focus are i. reducing the cost of consumption for manufacturing companies by working with their suppliers (often MSMEs), and ii. improving investor assurance through governance due diligence for startups and VC funding.
3. I was looking at Prime Minister Modi talking about the textile Industry. I have already done $350 billion in 2030 Analytics for Textile Industry. How to approach that? That is recycling of the waste, the PM mentioned, which is ignored by the textile units.
4. The Union Budget 2025 I praise for focusing on four engines of development: Agriculture, MSMEs, Investment, and Exports. I State ICGI as a mandatory requirement for each and every company. It must come from the government alone. It is non-mandatory as on today for very many companies and I reiterate companies to adopt it right now. I suggest that industries need to actively engage with these initiatives rather than passively receive them.
5. The concept of “Effort per Person” (EPP) is introduced as a key metric for measuring productivity and achieving growth targets, particularly in relation to India’s 2047 economic goals.
This is the sum and substance of ICGI Status Report.
Regards
Jayaraman
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Podcast Episode 86 CorporateMOM Analytics on Union Budget 2025
SUMMARY of the Transcript:
1. The Union Budget 2025 focuses on four key engines of development: agriculture, MSMEs, investments, and exports. 2. The budget introduces several initiatives to boost agriculture, including programs to enhance productivity, promote crop diversification, and improve irrigation. 3. For MSMEs, the budget proposes measures like enhanced credit access, digital transformation, and skill development programs to create a robust ecosystem. 4. The budget emphasizes investment through increased capital expenditure, interest-free loans to states, and a new National Manufacturing Mission. 5. I propose setting ambitious growth targets (15-20% CAGR) for individual companies and monitoring their performance daily, especially in areas like transitioning to a green economy and critical metals production.
I conclude: There should be at least one Think Tank guy within a company as a listening post then you are through because we are not looking at a company, we are looking at about a hundred to two-hundred thousand people within a particular company. So it is going to generate a lot of interaction between the government as well as the companies and make the profitability as the main issue. Growth is the consequent issue. Unless the growth comes of at least about 15%, 20% we cannot meet that 2047 as Viksit Bharat, it is not possible unless everybody puts in the effort. That’s why EPP Effort per Person is a very important issue.
It’s not that somebody is giving you a gift that you put it in your pocket and go away. What I am recommending is the monitoring system by MeRIT – Measure, Record, Implement and Track. This is what National Manufacturing Mission has to look at. That being said in terms of your 15% or 20% CAGR. National Manufacturing Mission must introduce to very many companies, as many companies as they can. I’m here to assist you. That is what I strongly recommend.
Every year one budget comes and goes but this year budget I think is spectacular and I appreciate Nirmala Sitharaman who has done a tremendous job. Reciprocity is expected from the companies for their own good. Buck-up Industry, tell us what Industry Associations in different forms went to FM before the Budget and what did you ask the FM? If given all the gifts you had asked for, it is time you show your commitment.
Regards
Jayaraman
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Podcast Episode 85 ICGI 04-05 – Buck up Big4 Audit Firms FEC Report – Public Assurance
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Podcast Episode 85 ICGI 04-05 – Buck up Big4 Audit Firms FEC Report – Public Assurance
ICGI 04-05 – Buck up Big4 Audit Firms FEC Report – Public Assurance
attrition of ethical values as a constant threat to society
The crucial aspect of corporate management is the acknowledgment, from Socrates to Marc Benioff, of the attrition of ethical values as a constant threat to society. Socrates had to teach the unlearned whereas Benioff has to appeal to the senses of the learned. The learned run far more risks than the unlearned. Merely professing fiduciary responsibility for the society insincerely but not being ready to avow, acknowledge, and assume the ethical responsibility to act upon, prevents a company from progressing forward. [My book extract]
In this context I am giving here a few extracts from my Podcast Episode #47 for this presentation deriving conclusions on the big 4 audit firms.
Buck up Big 4 Audit Firms
Here are 5 key points summarizing the transcript:
1. The “Big Four” audit firms (Deloitte, PwC, EY, KPMG) play a crucial role in accounting, but have been involved in auditing controversies with several high-profile companies. 2. There is an “entanglement” between auditors, bankers, and companies, especially in the startup ecosystem, leading to potential conflicts of interest. 3. Several Indian startups (e.g. Byju’s, Go Mechanic, PhonePe) have faced auditing issues, delays in financial reporting, and valuation markdowns. 4. The transcript criticizes the lack of governance in startups and the role of big investors, suggesting that poor governance leads to forensic audits and valuation markdowns. 5. I argue that India’s experiment with foreign audit firms has failed and call for the Big Four firms to “buck up” and improve their performance and responsibility.
Regards
Jayaraman
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Podcast Episode 84 ICGI 04- 04 – SOS Governance Standards – Governance over Financial performance
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Podcast Episode 84 ICGI 04- 04 – SOS Governance Standards – Governance over Financial performance
Summary
In ICGI Series 4-01 I focused on Empowering Auditors with the emphasis on FEC Report of Auditors – Self Governance. In fact it is Auditing of Auditors.
In ICGI Series 4-02 ESG Audit – I focused on Empowering Auditors with the emphasis on FEC Report of Investee Companies’ ESG Audit. It is indeed Society Assurance. In ICGI Series 4-03 HACCP of Bank Audit I focused on Empowering Auditors with the emphasis on FEC Report of Banks “SOS Governance Standards” approach to integrate P&L, Balance Sheet and RWA BASEL III parameters and provide a common rating system for Banks.
In ICGI 04- 04 – SOS Governance Standards – I highlight the importance of governance over financial performance
1. I emphasize the importance of governance over financial performance when evaluating companies for investment. 2. A framework is presented that includes fiscal responsibility, ethical responsibility, and corporate culture as key elements of corporate governance. 3. A “corporate atomic structure” is with 308 process blocks, of which 296 are qualitative elements and 12 are quantitative elements of management. [Gone up from 200 to 308]. 4. There is a strong emphasis on women’s empowerment, suggesting that women should be given control over the 296 ethical cum co-responsibility factors. 5. I recommend establishing a tracking system for governance standards, focusing on subject-object-self (SOS) governance and measuring, recording, implementing, and tracking fiscal, ethical cum co-responsibilities.
Regards
Jayaraman
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Podcast Episode 83 ICGI 04- 03 – HACCP of Bank Audit FEC Report – Economy Assurances
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Podcast Episode 83 ICGI 04- 03 – HACCP of Bank Audit FEC Report – Economy Assurances
Summary “ICGI 04- 03 – HACCP of Bank Audit FEC Report – Economy Assurances” is about * Jayaraman Iyer sends Narendra Modi a report on HACCP of Bank Audit, emphasizing the need for a “SOS Governance Standards” approach to integrate P&L, Balance Sheet and RWA BASEL III parameters and provide a common rating system for Banks.
ICGI 04- 03 – HACCP of Bank Audit FEC Report – Economy Assurances
In ICGI Series 4-01 I focused on Empowering Auditors with the emphasis on FEC Report of Auditors – Self Governance. In fact it is Auditing of Auditors. In ICGI Series 4-02 ESG Audit – I focused on Empowering Auditors with the emphasis on FEC Report of Investee Companies’ ESG Audit. It is indeed Society Assurance. In ICGI Series 4-03 HACCP of Bank Audit I am focusing on Empowering Auditors with the emphasis on FEC Report of Banks by selectively bringing in 13 CCPs Critical Control Points with the SOS Governance Standards Rating System.
HACCP of Bank Audit is Hazard Analysis of Critical Control Points of the Banks with SBI as the case study. The final Ratings are given for the selected 13 CCPs.
1. I advocate for a “SOS Governance Standards” approach to integrate P&L, Balance Sheet and RWA BASEL III parameters and provide a common rating system that is unique for the Banks to move forward. 2. SOS Governance Standards propose Banks prepare FEC [Fiscal-Ethical-Co-Responsibility] Report covering Economic and Social Development Goals – assuring Economy and the Society. 3. I emphasize the need for a dynamic database to track commitments by MeRIT – Measure, Record, Implement, and Track the CREAM Report – Corporate Governance, Risk Management, Earnings, Accounting Quality and Management Quality with everlasting Metrics, bringing CAGR to CDGR. 4. Hazard Analysis of the CCPs take the banks to several Risk Areas that could be handled well by fiduciary controls that are in essence is enabled by SOS Governance Standards, on a daily basis. 5. SOS Governance Standards suggest dividing large workforces into small teams, with one member focused on ethical responsibility to improve accountability and track performance, of each Branch.
Regards
Jayaraman
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In ICGI Series 4-01 I focused on Empowering Auditors with the emphasis on FEC Report of Auditors – Self Governance. In fact it is Auditing of Auditors.
In ICGI Series 4-02 ESG Audit – I am focusing on Empowering Auditors with the emphasis on FEC Report of Investee Companies’ ESG Audit. It is indeed Society Assurance.
*Equipping Boards with the Right Data Effective oversight of ESG will depend on whether today’s boards have the right information at their fingertips. In a research report by Forrester and Diligent, governance professionals indicated that ”’visibility into sustainability and ESG issues”’ was their greatest dissatisfaction.
Summary of my presentation: 1. I advocate for a “SOS Governance Standards” approach to integrate ESG (Environmental, Social, Governance) factors and provide a common rating system that is easily understandable, for all the 9 Social, 4 Environmental and 4 Economic Sustainable Development Goals of 17 SDGs, as well as how to integrate, for societal good. 2. SOS Governance Standards propose moving from “object governance” to “subject – object – self governance” (SOS), where companies establish their own performance standards and auditors provide third-party assurance. 3. I emphasize the need for a dynamic database to track CO2 emissions and climate-related commitments, with a focus on area-wise analysis rather than just per capita or country-wide metrics. 4. SOS Governance Standards suggest dividing large workforce into small teams, with one member focused on ethical responsibility to improve accountability and track performance. 5. I argue that companies need to move from accounting to accountability, setting specific targets (like 15% CAGR) to contribute to national goals such as “Viksit Bharat 2047”or reduce carbon intensity by 47% by FY 2033- 34.
My recommendation to Corporate India – DIY.
Employ Internal Governance Consultants and prepare an FEC Report for all the 296 Process Blocks of Qualitative Elements for your company that include ESG Parameters also.
If you can afford an Accounts Department you can as well afford a Governance Dept., can’t you?
Common ESG rating agencies & firms* At present, more than 600 agencies issue ESG scores. Some of the most common are:
* Bloomberg ESG Data Services #bloomberg * Corporate Knights Global 100 #corporateknights * Sustainalytics ESG Risk Ratings #sustainalytics * Dow Jones Sustainability Index Family #spglobal * Thomson Reuters ESG Scores #researchgate * RepRisk #reprisk * #esg #esgaudit
Podcast Episode 81 ICGI Series 04-01 Empowering Auditors – The FEC Report for Audit Firms
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Podcast Episode 81 ICGI Series 04-01 Empowering Auditors – The FEC Report for Audit Firms
CGI 04 -01 Empowering Auditors FEC Report for Audit Firms
Empowering Auditors FEC Report for Audit Firms
1. ICAI must take steps to remove Intangible Assets and replace to a Standard ‘Capitalization of R&D and Development Costs’.
2. Then Audit Firms can feel good to restore GRACE. GOVERNANCE, RESPONSIBILITY, AUTHORITY, CREDIBILITY, ENABLEMENT
Balance Sheet is their territory and allowing a non-monetary so called asset to creep in, is their mistake entirely. Correct it now, now, now.
3. Let me present FEC and CREAM Report for Audit Firms enabling ICAI to prepare an SQM.
4. Entity analyzed as a Corporate Body .
Happy Pongal
PS: An extract from my book: Quote: It has a sting in the tail that was not deliberated threadbare during the exposure drafts discussions or at the review stage of IAS 38. The conditions are entirely different in capitalization between 1977 and 1995. There was no need to displace IAS 9 and substitute with IAS 38, enlarging the scope of assets covered. Such intangible assets could have remained or made use of, as off–balance sheet assets, without bringing them into the books of accounts. Even now, strictly an intellectual property right (IPR) is a work-in-progress and gets validated only if a patent is obtained. The balance sheet must be fortified to exclude non-transactional entries. The balance sheet is a simpleton, like a foolish or gullible person, ready to accept what one offers. One can’t keep adding frivolous ideas to it hoping that accounting standards would help remove inconsistencies. Inventory accounting also has several methods of valuation. Select one and keep it simple. Leave the balance sheet alone.UQ
Regards
Jayaraman
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Podcast Episode 80 ICGI Series 04 Empowering Auditors AI Co-piloting ABC – Audit Firms, Banks and Companies
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Podcast Episode 80 ICGI Series 04 Empowering Auditors AI Co-piloting ABC – Audit Firms, Banks and Companies
1. An Intro to AI as a copilot.
2. Traditionally ICAI has been bringing in Accounting Standards from IASC/B and now IFRS a global standardization for Accounting and Auditing. The IASB operates under the oversight of the IFRS Foundation. The IASB was formed in 2001 to replace the International Accounting Standards Committee (IASC).
3. I pinpoint here IAS 38 Intangible Assets that was introduced in 1998 with the consequential impact on Audit Profession. I have given my recommendations to restore the GRACE [Governance, Responsibility, Authority, Credibility and Enablement] of the Audit Profession.
4. IFRS in its website states: The purpose of international accounting standards is “to develop IFRS® Standards that bring transparency, accountability, and efficiency to financial markets around the world.
5. I dwell upon the word Accountability, which has not been dealt with by IFRS also, let alone ICAI.
6. In order for ABC – Audit Firms, Banks, Investee Companies and Companies to be transformative in bringing in Governance standards, I present the requisite science based SOS [Subject-Object-Self] Governance Standards with an FEC Report for each of the above mentioned entities.
7. Case studies of M&M and RIL are made available.
8. Empowering Auditors is the crux of my presentation that I call for strengthening ICAI to re-calibrate its working to the demands of our society that is made up of MSMEs and pan puri walahs that our Chartered Accountants cater to, besides being the Statutory Auditors for all listed companies. Our CAs are a wonderful lot inspired by ethical motive. CREAM Report [Corporate Governance, Risk Management, Earnings, Accounting Quality and Management Quality] is common to all, the balance sheet of SOS Governance.
9. I have also recommended to set targets for 2030 and 2047 and play like an ODI to track performance, ex-ante instead of ex-post-facto. All can follow this principle including GoI.
Regards
Jayaraman
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