Auditors must also be sent to jail for PNB scam: Letter to BS

Letter of Undertakings (LOUs) issued by the Punjab National Bank (PNB) are said to be a fund-based facility. The LOUs issued by PNB and outstanding money collected thereon, and foreign exchange paid against the LOUs by other banks abroad at the end of each financial year should have been reconciled by the statutory auditors who certified the PNB's annual accounts. Obviously, the statutory auditors did not do any such reconciliation. They must be held accountable for not doing the required verification and reconciliation before signing the annual accounts of PNB, and sent to jail like the auditors of Satyam Computers who certified the company's annual accounts without verification of bank balances. The exemplary punishment to PNB statutory auditors should be a deterrent lesson to the auditing profession.

Ranganathan Sahasranaman 

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