The Institute of Chartered Accountants of India (ICAI) has initiated investigation into the role played by Price Waterhouse — the statutory auditor for the Hyderabad-based software services firm Satyam Computer Services — on a ‘suo motto’ basis ie based on information available in the public domain. The institute, which regulates the chartered accounting profession in India, has powers to revoke the practicing licence of its members in addition to a maximum fine of Rs 5 lakh. "It is a very serious issue and we are examining it on a high priority and strict action would be taken against auditors if found guilty," said ICAI President Ved Jain. If found guilty of professional misconduct, the auditors stand to lose their practice licences," he added.
Under IPC, any person party to a fraud or cheating can be convicted and can be booked under the Companies Act and the Chartered Accountants Act. "In case of negligence by the chartered accountant, ICAI has the provision of invoking a severe penalty such as withdrawing the practice licence from a few months to lifetime," Jain added. The ICAI disciplinary committee has the right to suspend the membership and withdraw the licence. It can also levy a fine of up to Rs 5 lakh depending on the gravity of the misdeed. For the moment, the disciplinary committee of ICAI would collect facts and information to nail down the auditors (Price Waterhouse in this case) involved in the financial fraud before sending a showcause notice to Satyam.
"It is an exceptional case driven by greed," said Jain on being asked if ICAI standards were followed by auditors. "We have learnt of the disclosure made by the chairman of Satyam Computer Services and are currently examining the contents of the statement. We are not commenting further on this subject due to issues of client confidentiality," PwC said in a press statement issued late evening.
However, another senior member of ICAI said that it was too early to pinpoint blame on the auditors and added that the book of accounts is a primary responsibility of the management and auditors merely audit the documents provided to them by the management and give their opinion based on accounts.
On the other hand, Institute of Company Secretaries of India (ICSI), which has so far remained an observer in this whole episode, said it does not have powers to investigate, but would take action if its members are found guilty.
"The company secretary has to act as an advisor to the board. As far as the affairs of Satyam are concerned, to what extent the company secretary was aware about the developments, and if he was aware, what advise did he give to the board is a matter of examination. The institute of company secretaries of India cannot investigate the affairs of any company," said Keyoor Bakshi, president of the Institute of Company Secretaries of India (ICSI).
However, he added that they would wait for concrete information on the role of ICSI members. And if it is found that the member is guilty of professional or other misconduct, ICSI can proceed to disciplinary actions under the provisions of the Company Secretaries Act. The Act provides for disciplinary mechanism, and the punishment can be suspension of membership depending upon the nature of misconduct, added Bakshi.
According to the Companies Act, auditors should be appointed by shareholders in companies' AGM, however, in most cases most shareholders are not even aware as to who their auditors are because it is the management, which is appointing them, informs the ICAI member.
How ICAI can probe Satyam scandal and on alleged involvement of its own members when one of its central council member Mr S gopala Krishnan is one of the accused and still sitting in the council.
I am an MBA (Finance).
There are some people like president of the ISB Hyderabad (former Independent Director SATYAM COMP.) and Mr.S.Gopalakrishnan,Central Council Member of the ICAI also the partner of PWC (still sitting and enjoying both) upon them nobody raising finger.
At last I my heart is bound to say that every human being involve in this shameful scam must get severe punishment otherwise there will be number of Harsad Mehta, Ramalinga Raju will come in near future.
If the investors? confidence is breached by the Auditors? community by certifying the false financial statements that will be the ?biggest shame? and injustice for all other practicing members and members who are working across industry throughout the world. The public confidence on auditors can be gained only when ICAI speeds up the enquiry process and initiate a severe punishment on members who found guilty in their duty to uphold the 60 years undoubted profession.
PWC assets globally should be frozen and distributed to shareholders and employees on a pro-rata basis differentiating the rate pre-raju comment.
They cannot just simply say that thier audit should be considered unreliable. They have no right to exist if they claim thier audits to be unreliable.
I m CA.I can not say who is wrong but Investigation must be made by ICAI. if fault comes of members of Institute, their membership must withdrawn then only other members will learn a chapter.
although as said that maintanance of books of accounts is the prime responsiblity of management yet auditor is required to follow both complaince and substantive procedure during audit, And if after substantive procedure if any fraud remains cocealed there this is a case of fraud and the auditors are responsible to disclose the conclead frauds.Because they give opinion of only as true & fair .
well myself also pusuing ca
acc to me this fraudulant activity occured in satyams is a fallout of management on the other part yes auditor being a wheel has driven that fruad before public
well this ca profession is very well knew its periphery regarding manupulation
todays scenario of corporate and audtors is takinga toil by leaps and bounds
okk lets c wt the best the icai do to protect
well myself also pusuing ca
acc to me this fraudulant activity occured in satyams is a fallout of management on the other part yes auditor being a wheel has driven that fruad before public
well this ca profession is very well knew its periphery regarding manupulation
todays scenario of corporate and audtors is takinga toil by leaps and bounds
okk lets c wt the best the icai do to protect
Iam a student of chartered accountancy course.
i believe that in an ca audit firm there should be a role of companies secretaries of india.
they should be incorporated in statutory audit of the companies. the reason being is that they have a vast knowledge about the company matters in india.
noone should belive on ICAI prove. in GTB( Global Trust Bank) case, Report has not submitted till date. so, ICAI will kill time time.
SEBI should take the control of Accounting regulator of India like SEC in USA. The Audit should be opened for other professional(Like Cost Accountants/ Company secretary)also. recently, SEBI has taken good move to allow Cost Accountants and Company secretary besides CAs to allow internal Audit of Stock Broker.
Has Sri S Gopalakrishnan,Central Council Member of the ICAI stepped down in order to facilitate an impartial enquiry on PricewaterhouseCoopers, Chartered Accountants? As a partner in PwC his continued presence in the Central Council will come in the way of an independent enquiry. I understand that PwC is already facing an enquiry in the wake of Global Trust Bank case. Sri Gopalakrishnan can restore his Council membership once the enquiry proceedings are over.
as per institute of chartered accountant of india , if the auditors has follow the accounting standards of icai and act as the statuatory auditor . as per auditing standard the auditor is just to express an opinion on financial statement prepared by the company. if the accounts are also prepared by them the they should be liable for their audit.
please look into the role of the firm since they were also involved in the GTB scam and are also linked with the Satyam Scam and both the cos. are based in hyderabad. also the pwc partner is the central council member, i would like him to tresign on his own taking his moral reponsibilities and then subject himself and his firm to investigations.
In Satyam episode due Price Water House Coppers, CA firm, the image of chartered accountancy profession is damaged. Unless the institute take action against the firm our credibility will not sustain.
Now, The Auditors of Satyam, Price water House coopers, The partner who has signed the balance sheet last year is also the central council member of the Institute of Chartered Accountants of India(ICAI). Now to have an independent action over the Auditor, ICAI Should first remove the partner from the Council immediately, so as to have independent action.
As a Statutory Auditor,PWC cannot claim to state that it was not aware regarding the fraud and misinterpretation in the financial statements. PWC is fully indulged in this case and should be held liable for its biased opinion regarding the financial position of the company that has created an unreliable image of CA.
ICAI should proceed for essential initiatives in this regard so that the Brand name of CA continues to be in future as it is existing in the eyes of world from the very past.
IF THE AUDITORS - PWC ARE PROVED TO BE NEGLIGENT ON SATYAM FINANCIAL SCAM, THEY SHOULD BE PUNISHED. SO MANY OF CLIENTS ARE ASKING US ABOUT THE AUDITORS ROLE IN THE SCAM. IF THE AUDITORS ARE NOT SERIOUDLY PUNISHED THEN WE, CAs,
ICAI has not taken any action on PwC in GTB case which is still proceeding...God only knows how long ICAI will take to probe into Satyam case...
If it is AICPA, they would have banned PwC by now like how they did in A&A case
Mr.S.Gopalakrishnan, a senior partner of PWC,is a Central Concil member of ICAI,unless he is suspended from the Central Concil, till the investigation is over, ICAI investigation is probable to be unduly influenced by him,and real justice may not be possible. The auditors are prima facea guilty of professional misconduct,besides possible collusion with the Chairman of Satyam.
In SATYAMs case what i feel is there is no fault with PWC as they did audit as per the satandards and satisfied with the explanations made by the company.The CFO who has an overlook of all matters must have went wrong.
If pwc found guilty of professional misconduct then their licence to Practice should be forefeited permanently by ICAI.
By doing above mentioned action ICAI give a message to other Member of ICAI that interest of user,s of Financial statement is of prime impotant.
The ICAI should punish the partner who has signed the balance sheet and also take action against PWC. By doing this , Institute can give a lesson to all such type of members who are involved in such type of activities.
As we have seen from the Big4 they knows only how to speeak english withought understanding the guist of audit matter.Hence this is one case other Big4s are understand the things withought doing what
------- Prakash
We believe our TheICAI is great to achieve to provide highest profession one cannot beleive that to disclose cash figure in financial statement withought having its existence cash in hand is seems to be blind on part of PWC.yoy have to withdraw their membership.
IT IS SHAMEFUL & DISGRACED ACT ON COUNTRY & BRAND INDIA . AS FAR AS AUDITORS ARE CONCERNED PWC SHOULD BE BLACKLISTED & IMMEDIATE STERN ACTION SHOULD BE TAKEN SO THAT AN EXAMPLE IS SET
I am sure most of the comments coming into this discussion board are from small time chartered accountants who cannot even dream of achieving what PwC has over the years. I can understand as one of my friend is a small time chartered accountant who believes that he can do a better job than any big 4. Its the arrogance of small time chartered accountants in India that make them think like this and even more talk absurd like this, as Yogesh mentioned.
In my opinion stern action should be taken by our Institute of Chartered Accountants of India against the Partner who has signed the balance sheet and also against PWC. That will be a lesson for those who are indulge in such activities and also to restore the dignity of CA profession. This should go down the history as an example.
any member of ICAI associated with PWC being also any council member of the ICAI should resign from member ship of the council to justify fair probe in the case of SATYAM
In any Case there has to be an action against PWC.
If PWC was aware of the fraud, then prima facie it should banned from operating in India.
If PWC was not aware of the fraud then it is shamefull for the firm, as they are not able to check the true bank balances of the company during audit. Where is the basic capability of an auditor ??
In one case its Integrity is questioned, in other its capability of unveiling fraud is involved.
In a listed entity audit committee members should be held responsible for all the mess. In the case of Satyam it seems that all the independent directors were not performing there duties in accordance with the Companies Act and Claue 49 of the lsiting agrremtn.
Independent directors should be punished regardless of there stature in the society. By simply resigning they can not absolve themselves from wrong doing.
There is no point in putting the list of companies audited by PwC? It cannot mean that these companies have also manipulated the accounts..Absolutely Absurd. People should refrain from making such reckless and irresponsible statements.
How many retail investors even understand what is audit and the role they play in a company? Read here if you wanted to understand it - http://iblogfinance.wordpress.com/2009/01/08/what-the-hell-is-audit/
Now, The Auditors of Satyam, Price water House coopers, The partner who has signed the balance sheet last year is also the central council member of the Institute of Chartered Accountants of India(ICAI). Now to have an independent action over the Auditor, ICAI Should first remove the partner from the Council immediately, so as to have independent action.
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