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Deloitte, KPMG have no licence to do audit work in India
16 Jan 2009, 1220 hrs IST, M V Ramsurya & Rajesh Unnikrishnan , ET Bureau
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MUMBAI: KPMG and Deloitte, the two firms entrusted by the new three-member board of Satyam Computer Services to audit the company’s accounts, are
not allowed to do audit work in India — a point that has not escaped the attention of the Institute of Chartered Accountants of India (ICAI), the regulatory body for accountants in the country. According to ICAI president Ved Jain: “KPMG is not allowed to practice in India. They are not registered with us.”
KPMG carries out its auditing work in India through BSR & Co, an Indian chartered accountant firm, that also signs on the balance sheets of Indian companies. Deloitte on the other hand does auditing through CC Chokshi & Co.
When contacted, a KPMG spokesperson said: “We are working with the new board of Satyam Computers. The scope of work and terms of reference are being discussed with a view to their finalisation . It is our understanding that the scope of work to be finalised is not reserved for chartered accountants registered with the ICAI.”
Although the KPMG spokesperson declined to comment any further, it has been reliably learnt that the Satyam board’s mandate to KPMG and to Deloitte, could likely include functions beyond auditing, such as the scope to do advisory work also. But this couldn’t be immediately confirmed. Deloitte couldn’t be reached for its comments.
Speaking to ET, a senior chartered accountant who is also the CFO of a large company, said that KPMG and Deloitte’s appointments could be a move to pacify international investors and clients of Satyam. “The name of a global firm like KPMG or a Deloitte is familiar to the outside public... they identify with such a firm and would probably feel reassured,” he added. Satyam is also SEC registered and it is expected that the US regulatory agency could also investigate the fraud at Satyam.
ICAI has over 145,841 registered members, of which fellow members total 61,288, while associates are 84,193 in number. According to ICAI regulations framed in 1984, foreign audit firms are not allowed to practice in India. Some of the other auditors contacted by ET said that KPMG and Deloitte cannot be appointed as statutory auditors as such a body can only be appointed by the shareholders at an annual general meeting.
On Wednesday, the Satyam board appointed KPMG and Deloitte to look at and restate the accounts of the beleagured software firm. KPMG’s presence in India is through KPMG India Pvt Ltd (an investment banking firm) and KPMG Consulting ( managementand consulting). The chartered accountancy firm, BSR & Co, formerly Bharat S Raut, is part of KPMG’s domestic and international network for auditing.
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ICAI has over 145,841 registered members, of which fellow members total 61,288, while associates are 84,193 in number. According to ICAI regulations framed in 1984, foreign audit firms are not allowed to practice in India. Some of the other auditors contacted by ET said that KPMG and Deloitte cannot be appointed as statutory auditors as such a body can only be appointed by the shareholders at an annual general meeting.
On Wednesday, the Satyam board appointed KPMG and Deloitte to look at and restate the accounts of the beleagured software firm. KPMG’s presence in India is through KPMG India Pvt Ltd (an investment banking firm) and KPMG Consulting ( managementand consulting). The chartered accountancy firm, BSR & Co, formerly Bharat S Raut, is part of KPMG’s domestic and international network for auditing.
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