KPMG and Deloitte, the two firms entrusted by the new three-member board of Satyam Computer Services to audit the company’s accounts, are not allowed to do audit work in India —a point that has not escaped the attention of the Institute of Chartered Accountants of India (ICAI), the regulatory body for accountants in the country.
According to ICAI president Ved Jain: “KPMG is not allowed to practice in India. They are not registered with us.” KPMG carries out its auditing work in India through BSR & Co, an Indian chartered accountant firm that also signs on the balance sheets of Indian companies. Deloitte on the other hand does auditing through CC Chokshi & Co. ICAI has over 145,841 registered members, of which fellow members total 61,288, while associates are 84,193 in number.
According to ICAI regulations framed in 1984, foreign audit firms are not allowed to practice in India. Some of the other auditors contacted by ET said that KPMG and Deloitte cannot be appointed as statutory auditors as such a body can only be appointed by the shareholders at an annual general meeting.
On Wednesday, the Satyam board appointed KPMG and Deloitte to look at and restate the accounts of the beleagured software firm. KPMG’s presence in India is through KPMG India Pvt. Ltd (an investment banking firm) and KPMG Consulting (management and consulting). The chartered accountancy firm, BSR & Co, formerly Bharat S Raut, is part of KPMG’s domestic and international network for auditing.
While E&Y the rule applies and they do audit in the name of S. R. Batliboi. As regards PWC they can sign as Pricewaterhouse and Lovelock and Lewis. The story goes like this:
Price waterhouse and Arthur Anderson entered India before this rule and hence were allowed to practice in their own names. That point of time one of the global firms also was Coopers and Lybrand which was represented in India by Lovelock and Lewis. Then Pricewaterhouse and Coopers and Lybrand merged globally to form PWC. But in India given the regulation they still sign as Pricewaterhouse as one firm and Lovelock and Lewis as the other
I WOULD LIKE TO KNOW WHETHER PWC & E&Y ARE ALLOWED TO DO AUDIT IN INDIA AS IN MY VIEW, THESE ARE ALSO HAVING THE SAME STATUS LIKE DELLOITE & KPMG. IF NOT, UNDER WHICH NAME THEY ARE AUDITING IN INDIA
I WOULD LIKE TO KNOW WHETHER PWC & E&Y ARE ALLOWED TO DO AUDIT IN INDIA AS IN MY VIEW, THESE ARE ALSO HAVING THE SAME STATUS LIKE DELLOITE & KPMG. IF NOT, UNDER WHICH NAME THEY ARE AUDITING IN INDIA.