Investors demand explanation for PwC missing Satyam fraud
Investors want to know why PricewaterhouseCoopers' Indian arm did not pick up billion-dollar black hole
Investors of Satyam, the Indian outsourcing company embroiled in a
billion-dollar fraud scandal, are demanding to know why auditors from
PricewatehouseCoopers failed to detect the accounting irregularity.
PwC’s role in the Satyam scandal is set to be investigated by the Securities
and Exchange Board of India, the markets watchdog, and the Indian government’s
anti-corruption office,
the
Times reported.
Only ten days after being brought in by the company to explore merger
opportunities, Merril Lynch found that the books did not balance. PwC India has
been handling Satyam’s audit since 2000.
Chairman B. Ramalinga Raju confessed shortly afterwards he had artificially
inflated the company’s profitability, falsely boosting its balance sheet by $1bn
(£655m).
In a statement yesterday, the firm said: ‘The audits [of Satyam] were
conducted by PricewaterhouseCoopers in accordance with applicable auditing
standards and were supported by appropriate audit evidence.’
‘Given our obligations for client confidentiality, it is not possible for us
to comment upon the alleged irregularities. PricewaterhouseCoopers will fully
meet its obligations to cooperate with the regulators and others.’
Further reading:
PwC
in spotlight for Satyam audit