A high-powered committee of the Institute of Chartered Accountants of India (ICAI) has recommended stringent action against the Indian arm of global audit firm PricewaterhouseCoopers (PwC) for delegating audit work in erstwhile Satyam Computer Services to an affiliate firm Lovelock & Lewes. 
The committee has found the Bangalore office of Price Waterhouse guilty of passing on confidential audit information about erstwhile Satyam to Lovelock & Lewes, said an official familiar with the development.

The audit of Satyam was delegated upon Lovelock & Lewes Price Waterhouse, Bangalore without informing the client, thereby indicating surrogate practice among the firms’ network partners, a key report of the ICAI points out.

The committee, chaired by former ICAI president Uttam Prakash Agarwal, was formed in the aftermath of the Satyam scandal and looked into the role of auditors in the over Rs 7,000-crore scam.

The report has been put up before the ICAI council for consideration, following which it will be referred to the ministry of corporate affairs.

The move to pass on confidential audit data to another firm is violative of the professional code of conduct norms of the ICAI, for which the committee has now recommended action against the firm as well as its auditors, the official said.

“Price Waterhouse used staff from its network of audit firms in India to undertake certain tasks on the audit of Satyam under a resource sharing arrangement and the staff used under such arrangement were at all times bound by the confidentially obligations followed by the firm,” Price Waterhouse said.

“This arrangement is, in our view, fully compliant with all applicable standards and regulations, and cannot be deemed as wrong or in violation of any law in any manner. Price Waterhouse, was appointed to audit Satyam and its partners were at all times responsible for the audit in compliance with ICAI standards and norms,” the audit firm said.

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0 responses to “ICAI committee recommended stringent action against the Indian arm of global audit firm PricewaterhouseCoopers”

  1. KSS says:

    ICAI ground for disciplinary proceeding against Price Waterhouse is laughable.

    Many of the midsize firms indulge in the same practice and partners from these firms are also in the Central Council of the Institute.

    These guys are making a laughing stock of the CA profession.

  2. NDE says:

    Institute (ICAI) also knows its peer review certificate could be bought because audit firm can choose its peer reviewer from among a list of choices. Thus a regulation is reduced into a shameful affair.

  3. TDS says:

    I thought it is well known that all the foreign audit firms operating in India have been indulging in the same practice so as to corner the huge audits and this is within the knowledge of the top bureaucrats and the Institute. How many retired CBDT members/officers are in the employ of these big firms and at what compensation and for what purpose?

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