RBI REJECTED APPOINTMENT OF AUDITING FIRM PWC AS AUDITORS

RBI REJECTED APPOINTMENT OF AUDITING FIRM PWC AS AUDITORS FOR COMMERCIAL BANKS

DEC 2, 2009 ICAI

The government today said the Reserve Bank of India (RBI) had not approved appointment of financial consultancy and auditing firm PwC as auditors for commercial banks from thefinancial year 2009-10 in the wake of alleged irregularities on its part in the Satyam fraud. “After reporting of alleged irregularities on the part of auditors of Satyam Computer, RBI has not approved appointment of PwC as statutory auditor in the scheduledcommercial banks from the financial year 2009-10,” Finance Minister Pranab Mukherjee told the Rajya Sabha.

The RBI had debarred two chartered accountancy firms, Lovelock & Lewes and Price Waterhouse and Co, erstwhile auditors of Global Trust Bank, he said.

However, after receiving representations in August, 2007 from both PwC and Lovelock, the RBI had advised banks that they may consider giving audit assignments to these firms from April 2008.

But when the multicrore Satyam fraud case surfaced and an allged role of auditors came to light, the RBI did not approve of giving auditing assignments to PwC.

Mukherjee also added that the the act governing the accountants under the ICAI did not provide for framing of rules or regulations for governing the services of multinational accounting firms.

“Therefore, the multinational accounting firms are outside the purview of the ethical and regulatory framework of the Institute of Chartered Accountants of India (ICAI),” Mukherjee said.

The provisions of the CA Act and the Regulations are applicable to the members and firms of chartered accountants registered with the ICAI.