Wednesday, April 22, 2009
Satyam and PWC
"Three employees from the finance department of software-services firm Satyam Computer Services Ltd. [SCSL] were arrested Sunday, while separately, the company's former chief financial officer told the head of an Indian accounting body that the company's outside auditors weren't complicit in cooking the books. ... Separately, Mr. Valdamani told the president of the Insititute of Chartered Accountants of India on Sunday that Satyam's outside auditors from Price Waterhouse weren't complicit in the fraud, said Uttam Prakash Agarwal, the president of the accounting body, in an interview. Price Waterhouse in the Indian affiliate of [PWC]. ... According to Mr. Agarwal, Mr. Vadlamani said the forged documents were given to the auditors and they 'relied on the documents provided by the management'," Jackie Range and R. Jai Krishna at the WSJ, 7 April 2009.
"The Indian federal agency investigating the accounting issues at [SCSL] said Tuesday it had filed charges of cheating and forgery against the former chairman of the Indian software exporter, B. Ramalinga Raju, and eight others. ... All the people charged worked for Satyam or a Raju family company except for Messers. Gopalakrishnana and Taluri, who worked for Price Waterhouse. ... Price Waterhouse said it was 'surprised and disappointed' that the CBI pressed charges against the two auditors. 'The fraud perpetrated by Mr. Maju and his cohorts was designed to and did circumvent PW India's audit process; the two Satyam audit partners--and PWC India--were victims of that fraud,' the statement said", my emphasis, Romit Guha and R. Jai Krishna at the WSJ, 8 April 2009.
This stinks. Was Vadlamani paid to try to exculpate PWC? I don't buy his story for a minute. Suppose the documents were forged, did PWC have the relevant banks authenticate them?
PWC makes a public profession of incompetence at best and expects it and its' partners to be let off the hook. I don't buy any of this. Pity poor PWC's "audit process". It's worthless as are PWC's audits. PWC, the fraud "victim", boo hoo.