Financial Accounting Doesn't Know the Score (int'l edition)

I strongly support Arthur Levitt Jr.'s plan to change the terrible situation (''Accounting Wars,'' Finance, Sept. 25). During the recent Y2K debacle, I was a consultant to many organizations worldwide. I discussed the problem with several hundred corporate and government executives. I have researched what Y2K means to the computing profession and management.

The auditor-consultant combines began by causing the Y2K problem, then hid its true nature from the public, and then made ghastly amounts of money ''solving'' the problems for which they were responsible. Had the system worked correctly, an audit would have recognized the risk in the middle to late 1980s and warned management of the need to address it. They did not do so. Senior analysts were either technically incompetent or hid the information. It then cost, by many estimates, $600 billion dollars to fix.

''Where Levitt's plan falls short'' (Finance, Sept. 25) is correct in saying that the main problem facing corporate auditing is how to address the fantastic asset value of IT systems. Companies have invested hundreds of billions of dollars in these systems. They are constantly updated and massaged to keep the enterprise healthy. Yet financial accounting still has not learned how to assess their value or their criticality to companies' continued economic health. Is there any major company that can truly be said to have an accurate asset value on its balance sheets?

Mordechai Ben-Menachem
Beer-Sheva, Israel

Don't Forget the Chaebol and the Communists (int'l edition)

It was great to see BUSINESS WEEK devote a cover to ''Korea's digital quest'' (Cover Story, Sept. 25). Your point that South Korea is the most wired nation in Asia needs to be better known, not least by the too-many Western analysts who can't imagine serious high tech anywhere in Asia outside the tired expat triangle of Japan-Hong Kong-Singapore.

But while excellent and comprehensive, the story missed two key aspects. First, to counterpose the new hot-wired Korea vs. the old world of debt-ridden, conglomerate dinosaurs and say it's ''an economy at war with itself'' is too simplistic. For better or worse, many high-tech startups, having been hailed as the long-awaited breakthrough for small business in Korea, promptly got into bed with chaebol such as Samsung (SSNHY) and Hyundai. Hardly surprising, as the big boys offer ready-made brands, marketing, and distribution networks. Even phonemaker Appeal needed such a tie-up, although it chose a foreign giant, Motorola (MOT). Let's just hope that for once in Seoul the tail can wag the dog, so the small fry can teach the chaebol new tricks rather than being swallowed up by these juggernauts.

Your other omission is the other Korea. What might stop South Korea soaring ahead into high-tech nirvana isn't just that $630 billion in corporate debt, but the even vaster sums that will be needed to rescue North Korea from famine and economic catastrophe. Even if a collapse scenario a la Germany can be staved off--which is the point of the current peace process--restoring the North's crumbling infrastructure will be a huge burden on the South's public and private purses.

In particular, how on earth will they meld a sophisticated society, where most people have handphones and surf the Net, with one where the few phones are fixed, the faxes are scarce and kept under lock and key, and the Internet unknown, except to a favored few? Still, it ain't all bad. North Korean colleges turn out savvy programmers who can write decent software--cheap. Samsung already hired some for a joint venture in Beijing. When North Koreans launch startups, we'll know Korea's digital quest really is cleared for takeoff.

Aidan Foster-Carter
Shipley, England

Football Clubs Don't Always Get What They Bargain For (int'l edition)

''Football's rich clubs may run the rest off the field'' (European Business, Sept. 25) makes a valid point about the unfair advantage that Europe's rich football clubs enjoy. But Manchester United is the wrong example to pick. First, Man U may be Britain's largest and richest club, but that has not played a key role in its success. Its long run at the top of the Premiership has been remarkable because Alex Ferguson managed mostly without the stunning sums that Spanish or Italian clubs routinely pay out for star players.

A better British example would have been Chelsea. The club's Italian manager, Gianluca Vialli, has stocked the team with expensive foreign players and has still not managed to win the Premiership. Paying out exorbitant sums for players can never guarantee success, as Barcelona proved last season. Smaller clubs have a better chance of survival if they focus on nurturing their own talent and getting better managers.

Kanika Datta
New Delhi

No One Is Asking Papuans What West Papua Wants (int'l edition)

The ''cabinet coup'' is replacing a well-meaning democrat with a hard-liner, Megawati Sukarnoputri, who has shown no interest in the concerns of the people of the ''outer islands'' (''Wahid's cabinet coup,'' Asian Business, Sept. 11). The Malukus lapsed into civil war not least because the military failed to prevent the Jihad forces from entering the Malukus. The military has even been accused of taking sides in the conflict. Whereas the duty of the army there now should be to disarm the militias and send the militants from other islands home or preferably to jail, the situation in Aceh and West Papua is completely different.

West Papua was occupied in 1961 by the Indonesian army. The presence of the army was never legitimized, and the 1969 ''Act of Free Choice,'' in which only 1,025 islanders voted under duress for union with Indonesia, has never been accepted by the U.N. On Sept. 8 at the U.N. summit, the Presidents of Nauru and of Vanuatu asked for reexamination of the Act of Free Choice. The Papuans have rejected its validity recently and declared West Papua an independent state. It is said that all those who voted at the Act of Free Choice have rescinded their votes.

Therefore, for all intents and purposes, the situation in West Papua is one of occupation. To say that the military, responsible for 40 years of human-rights abuses there, should be absolved of its crimes and be free to continue the repression of the Papuan people means continuing the criminal practices of former dictator Suharto. Yudhoyono airbrushes the obvious signs that indigenous Papuans are united in their nonviolent campaign for independence. Surely, a referendum rather than military repression is needed.

Nicholas Angelopoulos
Cambridge, England