PwC Auditors Arrested In Satyam Fraud Inquiry

theodp writes "Indian police arrested two employees from the affiliate of PricewaterhouseCoopers who audited Satyam Computer Services, the IT outsourcing giant at the center of the nation's largest fraud inquiry. The move comes after Satyam founder Ramalinga Raju said he had fabricated $1 billion of assets and confessed to making up more than 10,000 employees to siphon money from the software company. State Farm Insurance has severed its ties with Satyam, citing uncertainty about the company's future as 'the only factor responsible for the termination of the contract,' which will reportedly affect at least 400 on-site Satyam employees. Other customers, including GE, are standing by Satyam, one of the top recipients of H-1B and L visas (so much for those $500 Fraud Prevention and Detection fees!)."

Comments

Re:Only one way out of this mess

[sjames]

There are differences in the real costs of some things. The problem is exchange rate differences. That is, work 40 hours in place A and you can live for a week there or then take that cash and live for a month in area B. Do that same 40 hours of work in area B and you can't even live for a day in area A.

The problem comes in because it's much easier to move a job overseas where labor is cheap than it is to move oneself overseas to where jobs exist.

Were the exchange rates equalized out, beef in Japan would still be more expensive due to shipping costs and houses in the middle of nowhere would still be cheaper, but there would be nowhere near the differences we see now between labor and living costs in (for example) New York and Mumbai.

In turn, that would lead to greater efficiencies overall. A pair of shoes takes X hours of human labor no matter where that labor happens. Currently it happens far away from the market they're sold in and then they get shipped halfway around the world. Were things equalized, they would still require X hours of labor but would only be shipped 1000 miles over land (much less resource intensive).

Economy is supposed to serve the people, not the other way around.