In the Satyam saga, one thing is defying logic. Despite a prima facie indication that PWC might have been part of a fraud in which lakhs of public investors and thousands of employees are facing a huge financial lsos, the Indian Chartered Accountant’s Association (ICAI) appears to be going soft on PWC.
It is recalled that it was PWC, Hyderabad which was earlier involved as an auditor in Global Trust Bank which failed and ICAI enquiry is reported to have not been concluded even after 4 years.
When ICAI was questioned on action against PWC, it has been only making a political like statement that “Action will be taken”, “PWC may be suspended” but “Procedures have to be followed” etc.
ICAI has also raised objection to the Satyam Board appointing KPMG to go through the accounts and re state the profits of Satyam.
Even the Chartered Accountant’s Community itself asked for immediate suspension of PWC after the Satyam fraud was brought to light but ICAI seems to be un willing to take any punitive action against the firm.
It is also stated that in the Satyam records the PAN number of PWC is indicated wrongly.
It is inconceivable that a CA firm would make such a mistake as to misstate it’s PAN number unless it is done deliberately to facilitate some misdoing.
From the developments seen so far, it would not be in correct to say that PWC deserves immediate suspension from its activities in India. RBI has rightly advised Banks not to use the services of PWC and there is a need for Income Tax authorities to re check all accounts audited by PWC in the last few years.
It may also be necessary to initiate a CBI enquiry on the operations of PWC in India.
If ICAI is trying to shield PWC, it appears that there could be vested interests in ICAI who are trying to help the firm. Public would like to know who in ICAI is interested in bailing out PWC and why?
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12 users commented in " Why is ICAI soft on PWC ? "
Follow-up comment rss or Leave a TrackbackDo u have a minimum knowledge of Accounting dude? If not, then better shut up. PwC only did AUDIT & not an investigation of Satyam numbers. They went by whatever were provided to them.
Dnt make abosolute comments.
Bullshit
PwC (PricewaterhouseCoopers) is an international network of firms across many countries (~160) in the world.
PwC can be broadly divided into two major divisions, namely Audit and Advsiory (Consulting) services.(This is commonly a similar organizational structure across all the Big 4 firms).
Now one of the firms in the Audit division of under PwC by the name Pw(Price waterhouse), was the statuotary auditor in the unfolding saga.(There is another such firm in the audit division by the name Lovelock & Lewis.)Pw and L&L audit more than 100 large reputed companies in India.
An audit of financial statements of a legal entity is presenting an independentl opinion on such financial statements with reference to accuracy, completeness and fairness.
It should also be recognized that auditors have their own limited Scope of their assignment and cannot go beyond certain limits.
If malafide intentions and ulterior motives are under play , there are only limited means to corroborate the evidences presented.
However the complicity or competence of the auditors are under scrutiny and an independent investigation & legal processes shall determine whether there is a strong case against them, as still there is a need for some clarity on the veracity of the statements made in the now famous “tiger ride” letter. In this context, ICAI also needs to set its regulatory teeth strongly to set stringent norms and auditing standards.
Although PwC is bound by client confidentiality, it should come out clearly regarding news and views against it.
PwC should atleast educate the media regarding its organization, areas of business and employees and its nature of work and responsibilities to put things in a better perspective.
To SB.
Boss, We know what is auditors role.
Auditor is a person who checks the basic accuracy.His basic test checks includes getting the balances from the bank on the clients bank accounts including fixed deposit.
As is reported, It is known that they had lapses on this end. They havenot obtained the balances indepedently or ignored the same.
Any case, There is a wilful neglect and is subject matter of concern.
So You also understand what an auditors role :))
Dude, u are assuming pwc did not check balances idependently!!!!!
. I know audit procedures which pw follows as i worked there for 4 yrs. There is no doubt abt the integrity and competece of Pw. Its finest firm in India.
we indians take pride in blaming foreign firms,we think of the satyamites who are at risk of losing their jobs.
but we care a fig for those working with PWC. we are shouting “ban pwc”
but we don’t know the proper functioning of an auditor,we are assuming them to be an investigating agency. It’s a shame indian auditors are also behaving in the same way.
I think this is what we call “IRRESPONSIBLE INDIA”
Many things have said about the role of auditors and their responsibilities. But the fact remains that the auditor is not having adequate powers given by the statutes like the Companies Act, Income Tax Act to inspect the Board Minutes, directly getting confirmation from Bankers etc.Whereas an Inspector of Income Tax (it is notto derogorate the IT dept officials)has the powers to get the information, can directly call for the documents, the auditors can have the documents only through their clients and the basic responsibility of preparing the accounts lies with the Company management (Directors) and not with the Auditors.
to sourabh,
errr.. more like “Indians” instead of what you quoted. sad indeed, how do you expect India to grow or even become a global power. it is a joke that they are treating the satyamites as if they have done nothing wrong and pwc as if they took all the money.
India, wait long long and long before you call yourself even a power in Asia much less in the world.
to above,
agreed absolutely! its just sad, boss. When the fact is Raju name should appear more instead of PwC’s name. Load of crap here and there. What do you expect its India.
Look at what happen in Mumbai, and suddenly everyone forgot how useless the government is, and now they are trying to make this a sensational story and divert all the attention.
PWC Hyderabad is registered as separate entity other than PWC Bangalore or Delhi.How the an assesse (PwC) can furnish the PAN of other assesse (PwC Bangalore)?It is an offence
1)Offence under Incometax act
2)Violation of Code of Conduct
Since PAN tracking is easy , how PwC can take plea of innocence.
Auditor is certainly not blood hound and PwC is not certainly watch dog even a street dog.
Even one assumen that Bank statement & FDRs are all forged(provided to audit team) , in that case also liquidity crisis could have arise the suspicion.
Semifinished Project revenue mobilisation & reconciliation with degree of execution vis-a vis original contract could easily detect the case of fund syphoning or fund diversion at source
DBA softwares could easily track the malicious entries on accounting system.
Had PwC not been equiped to deliver quality audit, whats the diference with ABC & CO(CAs)for commanding fess for crore.
PwC, partners & staffs have lot of way to evade punishment because of lax legal framework.
CA Regulation Act or ICAI cannt be blamed unless Companies Act,Dept of Com Affairs & SEBI remains half baked body.
Audit procedure needs legal sanctions too
Hey folks.. defending PWC.. see the admission of two PWC black sheeps, they connived with Raju for cooking up books
Some CA’s also defending PWC,ha ha.. PWC took 4 crores fees last year and could not confirm bank balances. Raju may forge bank balance certificates, but can he forge all bank statements..so PWC cant do bank reconciliation!!!
Come to reality folks, dont take investors granted.. by taking refuge of ‘auditors are not investigators’, if you cant do your job better go for farming, else all corrupt auditors will be lynched.. playing with people mony.. investor activism is gaining momentum.. how come Big 4 did not learn from Anderson’s untimely death
Hi everybody,i would like to say that this is a very subjective issue, so we should not be judgmental while taking decisions.
Let the regulators (SFIO) do the investigation and issue a report which is going to happen very soon and only then we should make a decision as to the fate of the coveted organization.
Because of Harinderjit Singh
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