Action against partners, not audit firm, says ICAI

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The Institute of Chartered Accountants of India (ICAI) has said that the concerned partner who signed on Satyam Computers’ balance sheet will be held responsible and not the audit firm Price Waterhouse. “We can initiate action against the partners, if they are found guilty of audit failure but not against the firm,” ICAI vice-president Uttam Prakash Agarwal told ET. ICAI, an apex body for accountants and a quasi-judicial body, has already issued a notice to Price Waterhouse, seeking information on the partners and also copies of the accounts of Satyam that were audited by the firm, Mr Agarwal said. Price Waterhouse will be given a maximum of 30 days to respond to the notice. The disciplinary committee of the council will proceed on the matter if the firm doesn’t respond by then. The brazen falsification of accounts at India’s fourth largest IT company, Satyam, and the alleged failure by its statutory audit firm Price Waterhouse to detect the cover-ups has prompted both the ministry of company affairs and ICAI to take stringent steps. Reportedly, Price Waterhouse partner Srinivas Talluri had signed on Satyam’s balance sheet. Another partner S Gopalakrishnan had signed on the company’s 2006-07 balance sheet, a period that is also being looked into under the investigations. If found guilty, ICAI, through its central council, can remove the membership of the chartered accountants. “The institute can proceed only if we receive a complaint. Despite the public outcry, so far we haven’t received a single complaint — neither from banks, nor from shareholders,” Mr Agarwal said. “The institute, looking at the severity of the problem (in Satyam) has proceeded suo motto and issued the notice to the audit firm Price Waterhouse,” he added. Meanwhile, pressure has started mounting on two of the 40 central council members of ICAI to resign following the accounting scam at Satyam. Messages and email are doing the rounds among the CA fraternity seeking the resignation of PricewaterhouseCoopers partners and council members Harinderjit Singh and S Gopalakrishnan. The CAs feel that PwC’s distance from the central council of ICAI will enable the institute to conduct an independent inquiry into the Satyam scam. “We have been approached by number of CAs to remove two of the central council members who are partners with PwC. However, we believe that ICAI is not a political platform where we should indulge into seeking resignations after a controversy. Both Mr Singh and Mr Gopalakrishnan are elected members of ICAI,” Mr Agarwal said adding that both the PwC partners have assured ICAI of all cooperation in the investigation. Despite repeated efforts, Mr Gopalakrishnan could not be reached for his comments while Mr Harinderjit Singh said: “ I am not part of the central council as a nominee of PwC and hence there is no question of my resignation. I m a central council member and represent the mandate from ICAI members.” “Premature reports are pointing an accusing finger at PwC but let the investigations be complete, before blaming anyone for the Satyam Computers debacle,” he added. – www.economictimes.indiatimes.com

Replies (7)

 pwc should be black listed-it is not fair to say it is his partner's mistake only .he is also responsible -as ca responsible for his articles work

The action should be against the firm not only against the C.A. The firm should be suspended and rest the partners should be allowed to work but not in the capacity of the Firm

The ICAI should not held responsible only who have signed the Audit report,but all CA partners who have worked on audit of Satyam Computers.

I feel that the partners who have signed the balance sheet should be punished by canceling their COP and the firm should be levied with heavy penalty. As blacklisting the firm will effect the futures of many CA's working with the firm, so in my opinion the evil of one should not be a burden on other.

thats right. PwC india on the whole shudnt suffer bcoz of the lapse at thr Hyd branch only.

The whole PWC partners should not be punished. But normally a big audit would have been done by 2 or 3 partners.But signed by one. You have to punish all partners who have worked on satyam .You can get it in billing details. Considering the reputation of the ICAI it has to be done.

i think there is fruad or error from partners end and the punished to the firm is not vaible .so partners who audit the satyam is liable. but i think that pwc also in news in 1997 where the similar incident happens so some guide lines for the firm by institute also applied .


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