PW auditors knowingly falsified Satyam data: CBI report

CA CS CIMA Prakash Somani (Landmark Group) (23512 Points)

20 April 2009  

PW auditors knowingly falsified Satyam data: CBI report

 

20 Apr 2009, 0341 hrs IST, Kingshuk Nag, TNN

HYDERABAD: Contrary to earlier perceptions that the

But when they were at great variance with the data provided by Satyam, both Gopalakrishnan and Talluri at different points of time chose to ignore the bank data and "knowingly certified the inflated and forged

 

The CBI chargesheet says that both the auditors after facilitating projection of falsified data made "misleading" presentations to the audit commmittee of Satyam about the financial health of the company.

 

As consideration for this act of "accomodation" they received exorbitant audit fees from Satyam over and above the market rate "which reflects a quid-pro-quo arrangement," the CBI has charged.

 

What is more interesting is that these two auditors ignored the findings of even their internal checking team. The Head of Information Systems Audit of Price Waterhouse in the course of an 'information technology general check' found a staggering 180 deficiencies. This was communicated to the audit team who were told that the IT systems in existence in Satyam were "not fully integrated and subject to manipulation," the chargesheet says.

Gopalakrishnan and Talluri were told that "in the light of the above deficiencies substantial and elaborate examinations of the financials should be conducted." But the two at different points of time did not make any change in their audit plans.

 

The CBI has also charged that the two had wrongly signed the balance sheets of Satyam as partners of Price Waterhouse, though they were not partners in this audit firm. As per records of the

The statutory audit had been given to Price Waterhouse and not Price Waterhouse, Bangalore. This act of the two chartered

 

Curiously enough the two auditors had letters generated on the pads of Price Waterhouse from the computer systems of Satyam. These letters were addressed to the banks and directed them ( the banks) to directly inform the auditors about the bank balances.

 

About Gopalakrishna who signed the

Similarly Talluri is charged for allowing this fraud from 2007 onwards, the year from which he started signing the audit report. Both of have been charged for violation of various sections of the IPC. Both are in judicial custody for long and inspite of

Price Waterhouse auditors were taken in by the false fixed deposit receipts (FDRs) shown to them by Satyam's accountants, the detailed chargesheet filed by the CBI says that both S Gopalakrishnan and Srinivas Talluri had obtained independent confirmations from banks about the balances in the books of the IT company. balance sheets prepared based on forged FDRs and other data.."Institute of Chartered Accountants (ICAI), the two were partners of Price Waterhouse, Bangalore which is a separate entity. accountants were violative of the Auditing and Assurance Standards (AAS) 28 and invalidates the annual financial statement of the company.audit report of Satyam from 2001 to 2007, the CBI chargesheet says that "but for his active cooperation and disregarding the crucial evidence available with him, this fraud would not have taken for so many years." lawyers flying in from Chennai have not been able to secure bail.