Khurshid says govt examining action to be taken against PwC

ICAI says cant act against it,MCA says PwC status unsatisfactory & unacceptable....

Corporate Affairs Minister Salman Khurshid today said the government is examining the course of action that can be taken against audit firm Pricewaterhouse Coopers now that four auditors including S Gopalakrishnan and Srinivas Talluri have been found prima facie guilty by the Institute of Chartered Accountants of India (ICAI),the regulator for audit function.

It is a matter we will have to look into. But the question is the government should also have the power to do so. There has to be an appropriate procedure for this or it can hamper the prestige of the firms and people involved. We will examine what should be done in a case like this, Khurshid told the Indian Express when asked if the government was planning to blacklist the firm from practicing in the country after the recent findings of the ICAI in the Satyam fraud case.

Hyderabad-based Satyam Computer had plunged into a crisis after its founder-Chairman B Ramalinga Raju admitted to fudging the accounts of his company to the tune of Rs 7,800-crore.

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Khurshid said it is highly unsatisfactory and unacceptable that people operate in the country without lawfully being authorised to sign the balance sheets and financial reports. The government will decide on this by taking all stakeholders on board soon. We have to decide on this. In due course,in the WTO services agreement,these things will be addressed. It is clear that the present situation is not acceptable, Khurshid said.

ICAI had last week said that the board of the institute had found four auditors S Gopalakrishnan,Srinivas Talluri,P Shiva Prasad and C H Ravindranath two officials of Satyam and audit firm Price Waterhouse,Kolkata and Price Waterhouse,New Delhi prima facie guilty of misconduct. It has referred the matter to the disciplinary committee now and the committee will issue notices to them,replies for which have to be furnished in 30 days.

ICAI Vice President Amarjit Chopra said the institute cannot take any action against PwC but can take action only against Price Waterhouse. So the ball is now in the governments court. We cant do anything. Our hands are tied,we cant even recommend blacklisting. The ICAI Act has to be changed for empowering us. Once we have the power,it is only then can we debar the erring firms, Chopra said. He said the notices have been given to auditors and hopefully the case would be solved before the end of the next year.

PricewaterhouseCoopers was the statutory auditor to the IT firm which has since been taken over by Tech Mahindra. The company is now called Mahindra Satyam. Soon after the fraud came to light,PricewaterhouseCoopers had said that its opinion on the financials of the beleaguered company may be rendered “inaccurate and unreliable”.

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In a letter to the government appointed board of Satyam,the audit firm had said the statement by Raju may have material effect on the veracity of the firm’s financial statements and consequently,our opinions on the financial statements may be rendered inaccurate and unreliable.

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The victim, identified as Rupinder Kaur, was a native of Ludhiana, who had moved to the US. However, since some months she was living in Ludhiana.

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