The CA institute would use its powers to summon the Central Bureau of Investigation (CBI) regarding the audit papers on the cash and bank balances in the Satyam scam, the Institute of Chartered Accountants of India (ICAI) President, Mr Amarjit Chopra, told to press.
This would follow the ICAI’s questioning of the auditors involved in the scam about the procedures they had adopted for verifying the company’s bank balance, Mr Chopra said. “If the concerned audit papers are with the CBI, the ICAI would summon the CBI,” he said.
Mr Chopra said ICAI would start this month-end its disciplinary proceedings against Mr Srinivas Talluri, an accused in the case. He added that ICAI will also seek the Government’s view on filing an application before a Hyderabad court, which is currently hearing the case, to question another accused Mr S. Gopalakrishnan.
Mr Gopalakrishnan and Mr Talluri are the Price Waterhouse auditors accused in the case. Mr Talluri was granted bail recently, while Mr Gopalakrishnan is in prison.
Mr Chopra said, “We can question the counsel for the accused auditors from a legal point of view, but we need to question the auditors themselves regarding the facts, including their discussions with the management and if they verified everything.”
Satyam had allegedly inflated its cash and bank balances to Rs 5,361 crore, against the actual of just Rs 321 crore. This led to questions on the balance verification procedure adopted by the auditors, including whether they blindly went by what the Satyam management said or colluded with them, instead of personally counterchecking them.
The US agency monitoring audit firms, the Public Company Accounting Oversight Board, had recently imposed sanctions against two of the accused auditors – Mr Chintapatla Ravindernath and Mr Siva Prasad Pulavarthi. These two were top executives with PricewaterhouseCoopers’ associate Lovelock & Lewes, the former auditor for Satyam. The Satyam fraud broke in January 2009, when the company’s founder Mr Ramalinga Raju confessed to overstating its accounts.
ICAI had taken a good inititive to concluded wheather the auditor are guilty or not. but what ever it might be an audit is only the expression of veiw and not the certificiation so whatever is going on with the PWC auditor is not a right approach because audit had its own limitation and the fact is know by every professional. though most of the power are with auditor but it is in actual are only on the paper.