India Slaps PwC With Two-Year Audit Ban
India Slaps PwC With Two-Year Audit Ban

India Slaps PwC With Two-Year Audit Ban

India Slaps PwC With Two-Year Audit Ban

One of the world’s top accounting firms has been banned from auditing listed companies in India for two years. The country’s financial regulator has punished PwC for failing to spot fraud of over $1 billion at defunct tech firm Satyam Computer Services.
The Securities and Exchange Board of India said PwC auditors had failed to uncover irregularities in Satyam’s accounts over several years that were subsequently revealed in 2009 by Ramalinga Raju, the company’s chairman at the time, CNNMoney reported.
Raju admitted to inflating Satyam’s profits with “fictitious” assets, non-existent cash and misreporting of debts the company was owed. He was sentenced to seven years in jail along with nine co-conspirators in 2015.
Satyam was one of India’s leading software providers, with 53,000 employees and nearly 700 clients across 65 countries. (The company was bought by Tech Mahindra in 2009.)
PwC overlooked “several red flags.... which were all too obvious for any reasonable professional auditor to miss,” the Indian regulator said in its ruling published late on Wednesday.
SEBI also ordered the accounting firm to relinquish “wrongful gains” of around 130 million rupees ($2 million), plus 12% interest per year for the past eight years.
PwC said in a statement Thursday it was “disappointed” by the Indian government order, adding that there was no evidence to indicate any “intentional wrongdoing” on its part.
It is considering appealing the decision with the appropriate authorities, a source with knowledge of the matter told CNNMoney. “The SEBI order relates to a fraud that took place nearly a decade ago in which we played no part and had no knowledge of,” PwC said in its statement.
“We have, however, learned the lessons of Satyam and invested heavily over the last nine years in building a robust and high-quality audit practice.”
PwC currently audits more than 75 Indian companies covered by the order, and around 3,000 PwC employees could be affected, a source familiar with the matter told CNNMoney.
Its other businesses in India—including audits of unlisted firms—will not be impacted by the ruling. It will also be able to complete audits for listed companies for the current fiscal year ending March 2018.

Short URL : https://goo.gl/7B1b3t
  1. https://goo.gl/xCD6rP
  • https://goo.gl/mdaNnK
  • https://goo.gl/wTp7WL
  • https://goo.gl/ztqyQL
  • https://goo.gl/NF2ks3

You can also read ...

WB Predicts Myanmar Growth at 6.7 Percent
Given the government’s efforts to accelerate reforms and to...
Economists say the rise in rates would be much steeper if markets believed that Italy was actually prepared to go through with the plans. So far (the market reaction) has been clear, but not extreme.
The European Union's budget commissioner says he hopes Italy's...
Poland to Become Less Dependent  on EU Funds
The Polish economy will become less and less dependent on the...
New export orders in European manufacturing PMIs have been slipping for months and are likely to fall further in May.
While the on-again, off-again threat of an all-in trade war...
Talent Deficit May Hit Major APEC Economies
Asia Pacific faces an imminent labor shortage of 12.3 million...
South Korea has ranked 5th with 1.1% expansion.
South Korea’s economic growth rate ranked fifth among members...
N. Korea Not Seeking US Aid
North Korea on Sunday fumed at US reports that the country is...
Egypt Wealth Fund Seeking FDI
Egypt’s first sovereign wealth fund will help the country...

Add new comment

Read our comment policy before posting your viewpoints