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What we should discuss about Satyam -PWC?

Nikhil Kumar (CA , Qualified CPA) (910 Points)

08 January 2009

Its not about debarring or punishing PWC, thats not our job. But we should clearly see that what conditions existed that were responsible for such an act by PWC(a worldwide reputed firm). If its fraud, anti fraud measures need to be strengthened so that any other firm doesn't repeat it.

If its negligence and PWC people were fooled or deceived by satyam , then it is a deeper matter and the situations that led to negligence by the firm should be studied.

This scam proves that the antifraud measures taken after arthur anderson case were not sufficient.Otherwise this would have not happened.

Thus we should discuss about the additonal cautions we should take in future audits to avoid anything like this.

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28 Replies

CA Akshat (article) (422 Points)
Replied 08 January 2009

jusat tht v, the auditor should not be involved in like this as the ICAI is the partner in building the nation

v should maintain dignity and honesty

CA Sudhir Halakhandi (PRACTICING CHARTERED ACCOUNTANT) (13401 Points)
Replied 09 January 2009

DEAR FRIENDS

THE SATYAM SCAM WILL LEAVE LOT OF LESSONS NOT ONLY TO CAs BUT ALSO TO REGULATORS LIKE ICAI, SEBI, GOVERNMENT AND LAST BUT NOT THE LEAST INVESTORS.

S.RAMAMURTHI (SERVICE) (76 Points)
Replied 09 January 2009

ICAI MAY STEPIN FAST TO RESTORE HONOUR OF ITS MEMBERS.

MAY SUGGEST TO GOVT&OTHERS AS FOOLWS

1. COMPANY HAVING CAPITAL ABOVE 100CRORES MAY APPOINT AUDITORS

ONLY THRU CAG OR INSTITUTE & NOT BY THEIR BOARD,IF IT IS LISTED.

2.NO AUDITOR CAN CONTINUE FOR THE SECOND YEAR IN

SUCCESSION. HEALTHY BREAKSHOULD BE CONSIDERED.

3. FIN.INSTITUTE SHOULD LEND /KEEP THE CURRENT ACCOUNT OF SUCH LISTED CO ONLY AFTER ITIS CERTIFIED BY A CA OTHER THAN STATUTORYAUDITOR.

savita (Article Assistant) (43 Points)
Replied 09 January 2009

The satyam fraud case will leave back a lot of lessons for us as professionals and auditors. If PWC is involved in this fraud it is in a way spoiling the reputation of C.A Professionals and our work.

Nikhil Kumar (CA , Qualified CPA) (910 Points)
Replied 09 January 2009

I really hope that we learn some serious matter out of it.

But is it right to treat this incident as a loss of reputation to the whole CA fraternity- not all of us were involved.

Moreover, to err is human

shailesh agarwal (professional accountant) (7642 Points)
Replied 10 January 2009

err is human------IT IS NOT ERROR-----IT IS FRAUD-DELEBERATED---------WITH INTENTION----AND KNOWINGLY THE RESULT---------IT IS GREED OF HUMAN--------SHOULD BE PUNISHED IN SUCH A---WAY-------------------THAT IT WILL BECOME THE LESSION FOR -ALL CA'S-IN FUTURE-IT IS LOSS OF OUR REPUTATION

Nikhil Kumar (CA , Qualified CPA) (910 Points)
Replied 10 January 2009

Fraud/intentional act charges on PWC are not proven yet!
We never know, there might be a situation that led to such a big ERROR by pwc and not FRAUD.
atleast we can give them a chance to explain and prove their point
When after such a big scam by satyam we are not saying that this is a loss of reputation of all the corporates or more specifically IT majors then why are we linking it to the whole CA fraternity

CA.Shaleen Srivastava (CA , CWA*, Bcom(H)) (2004 Points)
Replied 10 January 2009

IS OUR ALL AS AND AAS ARE NOT FOLLOWED BY THE FIRM FOR MANY YEARS? IS THE FIRM DISCLOSE DISCLAIMER OF OPINION OR ADVERSE REPORT IN HIS AUDIT?

jacob (Audit ) (81 Points)
Replied 10 January 2009

After Arthur Anderson now its PWC, There are lot of concepts going around Corporate governance, SOX etc etc etc. but all control systems , procedures are human run and so, all these shows detoriation of human values and ethics which no control procedures can prevent, be it a big CA firm or small CA firm.

Professionals should undergo a rigourous study on their resposnsibilities towards society , values etc and its impact on common investors, if they are not judicously carried out. Specailly when it comes to money of common man.

Pooja Chopda (Practising Chartered Accountant) (931 Points)
Replied 10 January 2009

to err is human!!!!......this is not an error....this is an either an intentional act or carelessness.....which is wrong

CA.Gopal Rathi (Chartered Accountant) (188 Points)
Replied 10 January 2009

Don't you think guys we see a lot of CA's doing a fake practice ? They prepare Financial Statements on the basis of Tax desired to be paid by client and do all reverse working of profit and sales etc. Satyam is just one example I think and involves Crores of Rupees. I think lot of CA's are doing the same thing on smaller basis. To get higher loan from bank they show higher profits and higher sales. while for paying sales tax they show lesser sales. ARE'NT WE LYING WITH OURSELVS ?

Jeet Biswas (ACMA (in Service)) (5073 Points)
Replied 10 January 2009

PwC Hyderabad staff asked to stay away from office

10 Jan 2009, 0518 hrs IST, TNN

HYDERABAD: As the Satyam saga unfolded on television, the first to leave office weren’t just Satyam employees, but employees of the company’s

Top Accounting scandals

Different shades of Satyam

Satyam Fraud: The big questions

audit firm Pricewaterhouse-Coopers (PwC) as well.

One PwC Hyderabad employee came toBangalore on Friday and spoke to TOI on condition of anonymity: “Fearing that the employees might get caught for investigations or by the media, we were requested to not come to office. No timeframe was specified. While those who worked on the Satyam account were asked to stay in Hyderabad, the rest were told that they could leave town.”

A special team from PwC Delhi has been asked to look into the matter under supervision from a team from the global headquarters in New York, which is likely to come down.

“Phones of most PwC Hyderabad employees have been switched off since friends and relatives have been hounding us with calls,” he said. “Most of us are interacting with colleagues only through emails.”

When contacted the PwC spokesperson denied any such thing. “Our office has been functioning normally with regular attendance. And no special team has gone from Delhi. We’re all collectively looking into the matter,” she said.

Everyone’s favourite conspiracy theorythat Ramalinga Raju has diverted the funds for personal use, instead of inflating profits as he claimed - is being echoed at the PwC Hyderabad office too.

“Accounts may have been manipulated by showing land banks under litigation and exaggerating the BPO division’s losses,” said an official not part of the team handling Satyam.

src:https://economictimes.indiatimes.com/articleshow/3958863.cms

Amit Khandelia (Analyst) (125 Points)
Replied 10 January 2009

It is really shocking that the books of Satyam is certified by one of the world renowned auditors and a scam of 7K crore went un noticed. To top it all, auditors and independent directors went on certifying things year on year and charging astrnomical auditor fees and sitting fees.

I feel the regulatory bodies some come up with strong punishment ever in the history in Indian corporate to send a signal to the invstors and stakeholders that we are not going to allow any ENRON to happen in India again.