Auditing firm Price Waterhouse is likely to face a reprimand from the Reserve Bank of India for its alleged involvement in the accounting fiasco of Satyam Computer Services.
Source close to the development said a meeting to this effect would be held shortly. “Prima facie, we have decided to blacklist the firm and send the order to the Institute of Chartered Accountants of India (ICAI), who recommend the firms for empanelment for the audit of banks and non-banking finance companies (NBFCs)”, a source said.
However, the RBI will wait for the formal investigation report of the Securities and Exchange Board of India (Sebi) and the Registrar of Companies (RoC0, before issuing a final blacklisting order. Meanwhile, it may send a word of caution to the foreign and private sector banks who may be considering Price Waterhouse as auditor. “It is their independent decision, unlike in the case of public-sector banks. As regulator, we can warn them at best, “ the official said.
The sources further said the central bank’s work would be easier if the firm gets blacklisted globally as it managed the Satyam accounts both by the Indian method and the US GAAP method. These accounts formed the basis for pricing, listing and issuing of American depository receipts by the IT firm in the overseas markets. Thus, it amounts to duping international investors too. RBI will most likely not wait for the ICAI probe, which usually takes a long time, but will act on the Sebi and Roc reports.
If issued, this will be the second blacklisting order against the firm. The RBI is still awaiting ICAI’s investigation report on Price Waterhouse’s alleged involvement in overstating the losses of the erstwhile Global Trust Bank in 2003-04. The regulator had barred the firm from the audits of banks and NBFCs for three years following the case.
I think, we should and spread the word around.
The big 4 had always escaped the accountability. consider Enron to any of the big financial institution collapse.
We should develop metrics to periodically rate them.
Its the lesson for everyone including the Governement of India that all this Chartered Account Audit firms particularly the international firms are not reliable there be should be a strict policy against them and penalise severly not just cancelling the licience because the hard earned money of a common man had been lost.Price water CA are fully responsible for this mess and i dont think this firm audit should be expected for any other company also we have to re audit all thier client account
rbi would have banned the firm in 2001-02. this incident would not take place. the regulators allowed the firm to function and allowed the firms to loot the public at largein collusion with the firm.SEBI also could not take any action against the firm in DSQ software case. It will continue to happen in future in india.The auditors of DLF are also required to scanned. this firm had already looted public earlier foating DLF cement companywhich was delisted.
I am quite certain of the results from these superficial probes. Such mammoth fraud has lots of parties working \"hand in gloves\". Therefore:
1) Raju will fight a temporary legal battle and will be acquitted at the Apex court (else the battle will prolon till public memory fades...)
2) PwC will pay a small fine and continue doing audits merrily with Partner remunerations getting fatter by the day.
The government should take action against ICAI. Since the ICAI always protect their members.You should take the example of scam of Harshad Mehta, Ketan Parekh Global Trust Bank, Neither any charted accountant punished for that. Charted Accountat FIRM getting handsome fees for signing audit report. But every where institute say our Member are not responsible. What is need for charted accountant ? we have to think seriously.
They should be reprehended, they took fees for an audit that was not accurate, this cannot be acceptable. The purpose of auditing is to validated that standard principals and practices are being used. Is falsify audit?s the standard?
Pwc have been the auditors for Global Trust Bank as well as Satyam computers.It is seen that ICAI has not given the final report on GTB issue which relates to 2003-04 and yet to see the end of the day..Is not the delay horrible.If ICAI takes the same amount of time to finalise Satyam affair it will be like reducing the importance of the issue and give it an automatic demise.The RBI should fix a timelimit in such cases to give the final report to establish our credibility internationally.
Content Guide
