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INDIA BUSINESS WORLD - 1st JANUARY - TO - 15th JANUARY - 2009
PRICE WATERHOUSE ADMITS GOOF-UP IN SATYAM AUDIT
A week after Satyam founder B Ramalinga Raju's scandalous confession, it's the turn of his auditors. Price Waterhouse has finally admitted that its audit report, which overlooked one of India’s largest corporate frauds, is wrong as it was based on wrong financial statements provided by the Satyam management.
The move, however, doesn’t absolve Price Waterhouse—the Indian audit arm of Price Waterhouse Coopers—from allegedly failing to detect the falsification of accounts as admitted by the disgraced Satyam chairman.
In a statement sent to BSE, to the three new board members of Satyam, and to the company secretary of Satyam, Price Waterhouse tried to shift the blame of its inaccurate audit report on the false statements given by the erstwhile software giant.
In its statement, Price Waterhouse said: “The former chairman has stated that the financial statements of the company have been inaccurate for successive years. The contents of the said letter, even if partially accurate, may have a material effect (which is currently unknown and cannot be quantified without thorough investigations) on the veracity of the company’s financial statements presented to us during the audit period. Consequently, our opinions on the financial statements may be rendered inaccurate and unreliable.” This is the first time, ever since the Satyam scandal broke out on January 8, that Price Waterhouse has admitted that its audit report could be wrong.
The Institute of Chartered Accountants of India (ICAI), the apex body of accountants, is currently investigating the fraud at Satyam and the role of the auditors for allegedly overlooking the fraud, which includes mentioning a non-existent cash balance in its books.
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