While the Public Company Accounting Oversight Board (PCAOB), the regulator for auditors in the US, on March 16 barred Siva Prasad Pulavarthi and Chintapatla Ravindernath — senior executives with PricewaterhouseCoopers’ associate Lovelock & Lewes, the former auditor for Satyam Computers — in the IT firm’s Rs 7,000-crore fraud, the accounting regulator here, the Institute of Chartered Accountants of India, is yet to complete its disciplinary committee hearings.
LoveLock had undertaken the auditing of Satyam’s account for four years between 2004-05 and 2007-08. They were responsible for supervising and reviewing audit work related to cash accounts and receivables. The two auditors held important positions like Engagement Manager and Client Relationship Managers for Satyam audit.
The ICAI’s disciplinary committee hearing has now been fixed for March 30. When contacted, ICAI president Amarjit Chopra said, “We have fixed March 30 for disciplinary committee hearing against all those concerned with the Satyam case. We have not been able to proceed any further because the auditors were behind bars. We can’t function against law.”
The PCAOB, which had ordered an investigation in the case last January, banned the two auditors from associating with any registered public accounting firm “to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports”. It said the auditors had not cooperated with the board in the investigation of the case.
The ICAI is still struggling to take any action against Srinivas Talluri and S Gopalakrishnan, the auditors of Price Waterhouse Bangalore, who audited Satyam’s account. The institute rues that the reason for its inability to take any action is that the two were behind bars. Talluri was released last month on bail by Hyderabad additional chief metropolitan magistrate.
Chopra, however, said that though the institute can not do anything against the law, the government can facilitate the early proceedings. When contacted, Minsiter for Corporate Affairs Salman Khursheed told that the government can not bypass laws. “The proceedings are already underway in Sebi and substantial progress has been made. ICAI can’t take any action against foreign firms as there is no provision in domestic law. As regard the two auditors, they were behind barsm so the ICAI sought court permission. They are pursuing.”
It has been over a year that founder chairman of the the IT firm B Ramalingam Raju confessed to multi-thousand crore accounting scam with the help of top management and auditors. But the country is yet to see any concrete action against the perpetrators.
PwC refused to comment on the action of the PCOAB saying that both Siva Prasad Pulavarthi and Chintaptia Ravindernath had resigned from their positions with Lovelock & Lewes (one of the PwC network audit firms) in January 2010 and it would not be appropriate for the firm to comment on decisions taken by them after their resignations.