Satyam: PwC's trust under scanner
Finally, tainted Satyam Computer's auditor PriceWaterhouse Coopers has admitted its role in the gigantic fraud committed by the IT services company. PwC admitted that "audit reports and opinions in relation to the financial statements for the Audit Period [June 2000 to September 2008] should not longer be relied upon."
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The startling revelation by the auditors has added a new twist to the Satyam saga with newspapers and blogs across the globe giving detailed coverage to development.
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Premier business publication Forbesu00a0quoting PwC said its opinions on the company's financial statement may be rendered 'inaccurate and unreliable', given revelations of fraud by the founder of the outsourcuing firm.
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While giving details about PwC's admission, UK's Financial Times, says that the investigation into the Satyam fraud has broadened with the police beginning to scrutinize other companies controlled by Raju's family, which include Maytas Infra and Maytas Properties, both controlled by Raju's family.
In another report,u00a0the financial paper says that the government is looking into sales of Satyam shares "by a group of lenders and mutual funds" in the weeks before the startling revelation by Satyam's chairman.
While giving details about PwC's goof-up, Time says that senior executives of Satyam had sold an unusually large number of shares in the company before the fraud was revealed.
The blogosphere is also filled with comments about PwC.
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"How could Price Waterhouse India let this happen at Satyam?" has four possible answers," says this blogger.u00a0
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The blogger, in this post with an interesting headline, Price Waterhouse India's Slumdog Millionaires - Cheating Pays. says that its audit technique and "quality" standards "demonstrates the epitome of incompetence and professional negligence."
Another possibility, says the blogger, could be that PwC India partners "colluded with Satyam management to commit the fraud."
The other chances, says the blogger, are PwC India partners were "duped."
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According to this blogger, PwC holds a special place in the Indian business community due to their long presence in India.
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"Despite repeated audit failures, the PwC Global leadership and the Price Waterhouse India leadership was busy playing politics instead of tightening the quality and independence standards," says the blogger.
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"This is not the first time that PWC has erred," says this blogger.u00a0u00a0u00a0
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"It has erred on several occasions in the US, and it is under investigation even in India. It has actually 'erred' too much to be believed easily," says the blogger, listing out some of the accounting scandal cases where PWC was the auditor.u00a0
"PWC was found wanting by RBI in its audit of Global Trust Bank (GTB) three years ago. Indian Chartered Accountants of India (ICAI) is still investigating the firm's role in the said case. PwC, RBIu00a0 had noted,u00a0 failed to point out in its audit reports about the high levels of NPA of the GTB," the blogger points out.u00a0
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