No impact on tax, consulting: Price Waterhouse

Nine years after 7000 Cr Satyam Scam Sebi bans PwC for 2 years

Business News Nine years after 7000 Cr Satyam Scam Sebi bans PwC for 2 years By India Legal

A senior chartered accountant said the impact of the SEBI ruling on the auditing business of PW network firms and others can not be assessed immediately.

"We believe that the order is also not in line with the directions of the Bombay High Court order of 2010 and so we are confident of getting a stay", Price Waterhouse said in a statement.

There was no "intentional wrongdoing by PW firms in the unprecedented management perpetrated fraud", Price Waterhouse said in a statement after the SEBI order, adding that it had "learnt the lessons of Satyam" and invested heavily to build a high-quality audit practice.

"The SEBI order relates to a fraud that took place almost a decade ago in which we played no part and had no knowledge of", the firm said.

With SEBI barring all all the firms in the Price Waterhouse network from auditing listed companies for two years, the verdict is undoubtedly going to send shockwaves in auditing circles.

In its order, SEBI said while PwC's "loose-knit network arrangement" enabled partner firms to derive the advantage of its global brand value but did not lay down any supervisory mechanisms to check the quality of the performance of the firms. While making it clear that it will appeal against the Sebi order next week, Price Waterhouse (PW) also comforted around 3,000 auditors, saying that it will take care of their interest and there was no reason to worry.

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The ban comes after the firm was accused of negligence in its audit work at the now defunct Satyam Computer Services.

Besides, the watchdog has directed the audit major and its two erstwhile partners who worked on the IT firm's accounts to disgorge wrongful gains worth over Rs 13 crore.

"The SEBI order relates to a fraud that took place almost a decade ago in which we played no part and had no knowledge of".

The order issued by SEBI stated: "Listed companies and intermediaries registered with Sebi shall not engage any audit firm forming part of the PW Network, for issuing any certificate with respect to compliance of statutory obligations which Sebi is competent to administer and enforce, under various laws for a period of two years".

The order was passed under the Prevention of Fraudulent and Unfair Trade Practices (PFUTP) regulations and Section 11 of Sebi Act, which empowers the regulator to pass directions in the interest of investors.

As per the regulator, an auditor needs to proceed with the audit with an attitude of professional scepticism, and not get swayed by "one's (company) reputation during the critical process of evaluation".

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