ICAI to complete proceedings against Satyam auditors by June

The accounting regulatory body, the Institute of Chartered Accountants of India (ICAI), today said it would complete disciplinary proceedings by June against the chartered accountants involved in the multi-crore rupee Satyam fraud.

"After three months, we will be conveying to you something positively. After three months you will not be asking me this question anymore," ICAI President Amarjit Chopra said when asked about the status of its action against auditors S Talluri and S Gopalakrishnan of Price Waterhouse which was the statutory auditor of Satyam.

Chopra said the two auditors could not be heard as they were behind the bars, and now that they are out on bail, proceedings would be expedited. "Without hearing them, we could not have pronounced them guilty," he added.

Talluri and Gopalakrishnan were in custody for their alleged involvement in the Satyam accounting fraud perpetrated by founder-chairman B Ramalinga Raju.

Following the disclosure of the fraud in January last year, ICAI had initiated disciplinary proceedings against the auditors, who have also been found "prima facie" guilty of professional misconduct.

Chopra further said that ICAI's High-Powered Committee on Satyam has recommended action against guilty firms.

"The committee has suggested that either financial penalty should be imposed on tainted firms or they should be banned  from operating. Its now up to the Corporate Affairs Ministry to take specific decisions," He said.

According to the ICAI Act, members found guilty of professional misconduct could be barred from practice or fined up to Rs 5 lakh.

Talluri and Gopalakrishnan during the interrogation, told ICAI that they relied on the documents provided by the management and followed the accounting procedures prescribed by the ICAI.

On the lessons learnt from the Satyam accounts bungling that rocked corporate India, Chopra said, "I have always said Satyam was not an accounting failure, I treat it as a corporate governance failure. Accounting is a part of the pillar of corporate governance. Independent directors should also be held responsible for it."

The discussion on corporate governance got louder following the Satyam fraud, with the government involving industry to work out guidelines and more compliance.