PwC India learnt the lesson from Satyam Scam – Quits as GVK Infra auditor

Price Waterhouse — PwC India audit unit has resigned from the auditor’s role for the GVK Infrastructure, citing a lack of information provided by the company to prepare financial statements for the fiscal ending March this year.

Price Waterhouse Auditors alleged that despite several communications to GVK, the group did not provide them the necessary information for the audit of the financial statements for FY20.

Recently CBI had registered a case against GVK Group Chairman GVK Reddy, his son Sanjay Reddy, their companies, and nine other private firms that allegedly disguised the inflated figures using sham deals.

According to Business Standard PwC said, “Our resignation as statutory auditors of the company shall accordingly be effective immediately on the discharge of our obligations under the Companies Act 2013,”

PwC served as independent auditors of Satyam Computer Services.

Everyone knows Satyam Computers Scam; On the 7th day of January 2009, the chairman of Satyam, B Ramalinga Raju, resigned, confessing that he had manipulated the accounts of over 14 thousand crores in several forms. The Indian IT Industry and the global corporate community were said to be shocked and scandalized.

The Indian arm of PwC has served as independent auditors of Satyam Computer Services and managing the audits of Satyam Computer Services at the time of Satyam Scam.

US Securities and Exchange Commission(SEC) fined $6 million on The Indian arm of PwC citing code of conduct and auditing standards of the accounts of Satyam Computer Services.

In 2018, the Securities and Exchange Board of India (SEBI) banned Price Waterhouse from auditing any listed company in India for 2 years, stating Price Waterhouse — PwC’s Indian audit unit had neglected to check “obvious anomalies” in the financial details reported by Satyam.

However, in September 2019, The Securities Appellate Tribunal (SAT) has overturned the 2 years ban on PwC order by SEBI. SAT ruled that SEBI has no authority to look into the quality of audit and auditing services. ICAI(The Institute of Chartered Accountants of India) can only take any action against its members. Fraud cannot be proven based on audit negligence.

PwC India has surely learned the lesson from Satyam Scam, and PwC India’s resignation from the GVK Infra Auditors confirmes the importance of the Indian Market. The firm does not want any trouble again.

Please follow the Indian Information Technology Blog for the latest IT News.