Currently, there is a heated debate raging on the issue of corporate governance, across the world. The biggest fraud in India’s corporate history - Satyam fiasco, raised questions over accounting standards in India as a whole, as observers asked whether similar problems might lie buried elsewhere. This and related issues came up for discussion at “The India Investment Show 2009” hosted by Myiris.com, in Mumbai.

At the event, on Monday, Myiris.com held a panel discussion on “Can we prevent a Satyam?”. Chairing the panel was S. Swaminathan, the CEO and founder of IRIS, and India’s leading XBRL evangelist. Participants on the panel included Rajendra Chitale (M.P. Chitale & Co.), Shailesh Haribhakti (Haribhakti & Co.), Vijay Mukhi, Vikas Choudhury (Auro Vision) and Liv Watson (XBRL International).

In the discussion, Rajendra Chitale pointed out that it was too apparent that things at Satyam were desperately wrong. It is imperative to create effective deterrence against such corporate frauds, Chitale asserted. “We need to have a mechanism in place,” he added.

Speaking on transparency and corporate disclosures, Shailesh Haribhakti said, “There is a need to make everyone responsible in the system. Every company should be more accountable to shareholders through financial reporting, auditing, transparency, etc.”. Referring to this, Vijay Mukhi said, “Satyam showed us how vulnerable our money was!”

A key part of the discussion was the role of technology to improve transparency. The use of XBRL (eXtensible Business Reporting Language) technology will prove the most suitable way to improve information transparency, said Liv Watson. Every document released should be in XBRL, Mukhi added. XBRL will provide a vehicle for greater levels of control and greater levels of insight into information management in the modern enterprise.

XBRL can be viewed as a system of bar codes for financial statements.  It allows companies to use nationally and internationally common `tags` to identify individual reporting concepts that exist in a corporate report. Information that is coded in this way can be instantly and accurately exchanged between systems. XBRL can change the way an organization’s performance information is defined, produced, exchanged and communicated. It’s not just a transport mechanism, it’s also a way to define, constrain and relate information.

S. Swaminathan shared the findings of the Myiris.com Study with the panel. More than 200 listed Indian companies have discrepancies in their annual audited financial results. Some of the errors are serious, like for this company whose reserves in the balance sheet show a whopping Rs 2.16 billion discrepancy. The study was carried out by analysing the financials of the past 5 years of more than 1,400 listed Indian companies.

“It is all about transparency,” said Liv Watson. In summation, it was clear that improved transparency with technology will go a long way to help avoid a second Satyam.