Re:Balance -- Jim Peterson

The PCAOB Settlement in Satyam: PwC Agrees to Fall on its Pen-Knife

“Two aristocrats challenge each other to see which can come up with the larger number. The second agrees to the contest, concentrates for a few minutes, and proudly announces, “Three.” The proposer of the game is quiet for half an hour, then finally shrugs and concedes defeat.”

-- John Allen Paulos, “Innumeracy,” 1988

 

 The PCAOB’s April 5 settlement with the Indian firms of the PwC network, over the billion-dollar fraud at Satyam Computer Services Limited, adds a $1.5 million fine to the six million dollars the auditors also agreed to cough up to the SEC.

(Statements from the agencies are here and here; see Going Concern for the orders; and the NYT for statements from PwC.)

The amount compares to the aggregate salary of the five PCAOB members of $2,366,000. It would be a small fraction of either the annual compensation of PwC’s global chief Dennis Nally, or the firm’s legal fees on Satyam to date. And even measured by the $ 550 million ponied up by Goldman Sachs under its August 2010 SEC settlement of its one-issue dispute over the “Abacus” derivative peddled by its fabulous Fabrice Tourre (here), the amount is derisory. 

The Big Four giant is still facing on-going investor claims, to be sure. But the exposure is well-fenced; the Supreme Court’s June 2010 decision in Morrison closed the doors of the American courts to foreign securities claimants who bought their shares abroad, and the inexperienced Indian judicial system lacks the competence to be an attractive plaintiffs’ venue.

Consider the motives from the regulatory perspective. The settlement timing ahead of the April 6 hearing of the Senate Finance Committee on the role of the accounting profession in the financial crisis (here) gave senior officials a public forum. And the media coverage allowed the SEC’s enforcement head Bob Khuzami and FCPA unit chief Cheryl Scarboro, and the PCAOB’s chairman Jim Doty and his enforcement head Claudius Modesti, all to strut their achievement against foreign auditors – even while avoiding the obligation actually to try their case across international borders.

From the PwC perspective, meanwhile, the chance for a cheap exit from a major problem would have been a no-brainer. Consider:

First, an enforcement ding on the Satyam engagements had to be coming, sooner or later. From the PCAOB’s order – which PwC agreed not to contest – the Indian engagement teams on the audits from 2005 through 2008 basically did not:

• Adequately audit the company’s cash positions
• Control the confirmation process on bank balances or accounts receivable
• Pursue indications of inconsistent information or control weaknesses
• Follow PwC global directives on audit execution
• Inform or advise higher-level quality oversight personnel
• Document the work actually done (or not) in the work-papers, until subsequent back-dating while already under regulatory scrutiny

So a strategic decision not to defend the indefensible indicates early recognition of a step toward sustainable credibility. 

As for the sanctions – PwC’s undertakings on future practice quality, staffing, training and internal oversight are no more than necessary for an enterprise with aspirations to professionalism; the two-year presence of an outside monitor only adds one more stranger to the list of foreign intruders imposed on its Indian practice; and the six-month restraint on new SEC clients runs only to the settling Indian firms, so does not inhibit either the global network or its other Indian affiliates.

And, lastly, the financial impact of the fines on the massive PwC network is no more than a dime added to a roll of nickels.

For good measure, with the week’s news cycle dominated by military activities in Libya and a threatened government shut-down in Washington, and subsidiary attention to post-earthquake Japan’s nuclear hazards and Silvio Berlusconi’s “bunga bunga” trial, the entire story will drop off the media screen in less than no time.

Predictably, critics of the accounting profession who are unwilling to settle for less than the scalps of the Big Four leaders nailed to an enforcer’s door will make their outrage known.

But they will fail to acknowledge that both the regulators and PwC itself are only acting in full accordance with their respective DNA.

So once again, this settlement points up the challenge to the long-term achievability of a valuable, sustainable assurance function, to serve the issuers and users of the financial information of global-scale companies: the terms of the discourse are revealed as hopelessly inadequate.

 

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Re-Branding at PricewaterhouseCoopers -- OMG, It's Like Totally Awesome!

 What are they thinking, in the leadership suites of PricewaterhouseCoopers? As reported by Caleb Newquist (here), coming days will see their lengthy if perfectly serviceable name abandoned in favor of the three-letter vernacular – and the adoption of a new toy-blocks logo that defies the search for adjectives of awfulness.

 The commentary will be fierce, in several areas off my turf:

• Branding experts will go to town on the empty nature of the attempted graphic gesture.
  
• Jargon critics such as the Financial Times’s Lucy Kellaway will tee off on the mish-mashed vacuity of the aspirational messages (for those of strong constitution, see this PwC video sent to Caleb from the inside).
• Charlie Green, expert in trustworthiness, is invited to unpack the disruptive influence of tinkering with messages, when all that is on offer is the stability of relationships with clients and users.
  

My concern is more profound:

When the accounting profession’s very survival rests on the ability to sell a basic core product – assurance on financial information – the essence of that delivery is the maintenance of confidence among issuers and users in consistent, solid and predictable quality service.

That has been more than challenge enough, in difficult times for the profession. But its messages can and should be pretty stolid. A slightly boring orthodoxy is not a bad thing, when the profession is the only one that requires two terms to describe itself and its core offerings: accountant and auditor – contrasted with, for example, doctor, lawyer, priest or engineer. 

When the uniform for successful assurance delivery requires the equivalent emotional symbolism of a necktie and brown shoes, the PwC effort goes the wrong way. Being courant requires context. No chief financial officer will be comfortable receiving his annual audit report from the hands of an engagement partner named Pariz or Tiffany and sporting a tattoo and a nose ring.

Prior history offers instruction on the hazards of tinkering with the image of a commodity product. The fiasco over New Coke in 1985 put that company into a legendary market-share tangle that lasted for years.

Much closer to home, does nobody recall the kerfuffle in 2000 when Arthur Andersen gave up the logo of its dependable brown doors – symbol of stability, consistency across all offices and – yes – the requisite geeky solidarity? 

Instead there was launched that goofy orange ball – derided at the time for a lack of substance, but with hindsight, comprehensible to reflect the firm’s hollowed-out loss of strategic integrity and, in effect, the sunset for a venerable institution less than two years later.

We may of course expect defensive messages from the branding types at PwC, justifying what must be massive expenditure for this effort, along the lines of “we wanted to shake things up” and “we have an exciting new set of messages.”

Trouble is, they don’t, and the world of assurance users doesn’t want it. The depth of the issues facing the accounting profession means that the current environment does not require simplistic needs to “fix what ain’t broken.”

Rather, putting fresh cosmetics on a critical patient only paints over the gruesome reality. And if the beauticians are running the hospital ward, the prognosis for recovery is grim indeed.

 

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Guest Post at the FEI Blog: When Litigation Kills the Accounting Profession -- Don't Say You Weren't Warned!

Edith Orenstein's FEI Blog is a "must read" -- a thorough and lucid map of the goings-on in Washington among the  legislators, regulators and agencies of law enforcement. I have the pleasure this week of taking up Edith's kind invitation for a guest post, while she is on vacation:

With the devilish details of the Dodd-Frank Act now to be worked out and many special interests weighing in, legislative activity in the American financial sector returns to a standstill – probably until after the elections of November 2012.

So what would bring to the forefront a topic that to most is sleep-inducing, although it keeps some few from sleep: namely, the very viability of the large accounting firms and their fragile franchise to audit the world’s global companies?

Nothing less, presumably, than an existential shock to the stability of one of the Big Four tetrapoly – an unresolvable criminal investigation or a “bad case” outcome in one of their nightmare civil cases. . . . . For the entire post, and to see the scope and quality of Edith's own work -- please see here.

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How Dangerous is the Two-Billion Dollar Suit Against PwC Over Iceland's Glitnir Bank? The Answer is Blowin' in the Wind

Especially for PricewaterhouseCoopers, the bad news out of Iceland just won’t let up.

First it was the October 2008 collapse of the country’s entire banking system – including its three largest banks – and the departure of their former leaders for congenial places of refuge.

 Then it was the volcano with the unpronounceable name, closing airports world-wide in a demonstration that it is not nice to disregard the forces of nature.

 And on Wednesday came the announcement of a two-billion-dollar lawsuit, brought in New York by the winding-up board of Reykjavik-based Glitnir against its former chairman, chief executive and other leadership, lead investor Jon Asgeir Johannesson, and its auditors PwC -- here.

 It’s an updated reprise of the hitchhikers’ bumper sticker from the 1970’s: “Cash, ash or crash – nobody rides for free.”

 (Okay, for those who don’t remember the original – here.)

 Although asset-freezing orders were apparently issued out of the High Court in London affecting Johannesson’s real estate holdings, those among the individual defendants presently outside the reach of the American or Icelandic legal systems poured scorn on the proceedings – here.

 Bombastic posturing from sheltered jurisdictions will cut no ice with the litigation process in America, however, and PwC itself issued the predictably bland statement (here) about standing by its opinions.

 Well it should, because the days are over when litigation arising out of the non-English countries could be disregarded as trivial, disrespected as the works of immature jurisdictions where outcomes were negotiable against a backdrop of mutual accommodation and inconsequential impacts.

 Instead, PwC faces a real lawsuit (for the complaint, here), in a real court – Manhattan’s New York Supreme – brought on behalf of the bank’s creditors and advised by Steptoe & Johnson and Slaughter & May – real lawyers who know their billions from their millions. Nor, any more than any of the other Big Four accounting firms, does PwC have the resources to absorb a ten-figure litigation blow (here). 

 So the proceeding is mightily more serious for PwC than a few days of flight delays. The Glitnir proceedings show yet again that the world of life-threatening auditor litigation has become as borderless as the skies of global air travel.

 Blowing smoke is not going to make this one go away.   

 

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Prisoners of Satyam: Price Waterhouse Auditors Still Under Arrest

An eye for an eye and a tooth for a tooth.
The system seems fair
But is really quite ruthless.
For in time all involved
Become eyeless & toothless.  

The succinct wisdom of the late poet and trenchant social critic Jodie Hansen frames the dust-up started by my criticism of the extended jailing of the Indian audit partners of Price Waterhouse responsible for that firm’s work on Satyam Computers Services – here. That mis-treatment began with their arrest over the January 24-25 weekend and continues, bail applications having failed, apparently at least to late this month.

The PwC organization and its people have their hands amply full in defense, both in India and in the shareholder cases promptly filed in the US, and it is not my point, nor for anyone at this stage, to pre-judge the outcome.

Rather, it is right to scrutinize the means and quality of government response. One American reader, known to me as a wise counselor and teacher, wrote that:

“The Rule of Law has protected us (in America) from the get-go. Here we believe that not only must the result be in accord with law, we give equal importance to the process.”

The contrasting view of a reader in India was that my views were “totally objectionable,” on two grounds.

First, Mr. Ramakrishna asserts, “the Indian legal procedures and systems are far more stable and consistent than their counterparts in the US where far more fraudsters have gone scot-free.”

This is subject to test. Checking the recent roster of the post-Enron convicted and incarcerated – Messrs. Ebbers, Skilling, Fastow, Kozlowski, Black and Rigas come to mind, and adding Weiss and Lerach to boot – the wheels of justice seem to have ground along.

What would be fair grounds for criticism, though, to anyone evaluating the tax-payer impact of the world’s various bail-out packages or checking a retirement fund statement, is whether any of these machinations have wrought the least deterrent effect – either in the US or anywhere else in the world.

Mr. Ramakrishna goes on that “it is a good thing that the Government of India superseded the (Satyam) board and imprisoned the fraudsters – including the auditors.” His basis is evidently the long logical leap that audit quality is to be achieved by mandatory rotational appointment of auditors for a fixed term, and public posting to a website of all audit notes and working papers.

Global-level discussion has long since explored and declined to act on a roster of impractical and unachievable solutions to the persistent issues of audit quality – here. The only country to experiment with mandatory rotation is Italy, with conspicuous lack of success: There, required rotation led to an increase in concentration of large-company work by the large firms, while the 2003 exposure of a € 20 billion hole in the balance sheet of dairy products giant Parmalat exposed the gaping question of any positive impact on corporate reporting and governance.

This Indian reader also cited the critical observations about PwC of my estimable colleague Francine McKenna – Re:TheAuditors – whose characteristic umbrage at the behavior of the large firms was equally directed to me:

“I am a bit surprised you chose to spend so much precious space worrying about the poor PwC partners in custody…. It may be unusual by our standards. In fact it’s downright rare. But at this stage, I’m sure you’ll find lots of folks in the US wishing a few more CEOs, CFOs and auditors were sitting behind bars, examining their consciences.”

Sorry, but even appreciating the natural instinct for punishment and vindication, I will worry.

For what’s the rush? The careers of the PwC partners are in shreds, no matter what. They will never again put pen to a professional opinion, even if their firm does survive – which is far from sure.

The measure of a society’s civility is in how it treats its least – the poor, sick and hungry; the minorities and the disadvantaged. And, importantly, the accused. And those rights extend no less to a professional auditor than to a slumdog – else they dependably protect neither one.

Popular confidence essential for stable democratic institutions rests on trust in the agencies of government. Which requires that the exercise of power by those with the authority to use it be done not in a hasty rush to punitive judgment, but with the restraint and good process that engender credibility.

Robert Bolt’s 1966 play, “A Man for All Seasons,” made the case for the law’s restraint:

Sir Thomas More: What would you do? Cut a great road through the law to get to the Devil?
Roper: Yes. I’d cut down every law in England to do that!
More: Oh? And when the last law was down, and the Devil turned ‘round on you, where would you hide, Roper, the laws all being flat? …. Do you really think you could stand upright in the winds that would blow then? Yes, I’d give the Devil benefit of the law, for my own safety’s sake!

The alternatives are the tyranny of petty officialdom, red tape and corruption; pervasive short-term opportunism by those exploiting the cozy roles of insiders; and, not least, a citizenry both cynical and fearful.

Those choices are made at the local country level. It’s their resolution that determines whether a polity – Indian or otherwise -- deserves full and equal participation in a mature globalized economy.

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Satyam's Auditors from PwC Remain in Custody -- A Prisoners' Dilemma for "Indian Justice"

Even as I said last month that the Indian government’s reaction to the billion-dollar fraud confessed by Ramalinga Raju, the CEO of Satyam Computer Services, would be protracted, disruptive and expensive – here – one manifestation both expected and unpleasant was an excess of prosecutorial zeal.

The Satyam saga has a long and ugly ways to go. But for PricewaterhouseCoopers, auditors of Satyam from 2000 until recently sacked, it is unjust and offensive that its Indian engagement partners – S Gopalakrishnan and Talluri Srinivas -- should be in confinement for what is now almost two weeks and counting.

PwC and its people will eventually have a lot to answer for – the extent is presently unknown, and an impossible topic for uninformed speculation. In a best case, the two individuals are already professionally ruined; the firm’s Indian practice will take a serious reputational hit, even if it survives; and the eventual settlement cost of the flurry of shareholder suits will be painful.

That’s the best case. At worst, although the leadership of the profession could never be heard to admit it aloud, Satyam could be the fatal bullet in the global game of Russian roulette that the Big Four are playing with their survival.

No position is taken here on the defensibility of PwC’s work for Satyam – that’s entirely premature, until a credible legal process works its way. Nor, as regular readers know, am I an apologist for the large firms – neither for the persistence of their inability to learn from and surmount their recurring performance short-comings, nor for their mismanagement of the public dialogue in fruitless pursuit of impractical and politically unachievable “reforms.”

But – to be held without bail or lawyers, much less the consultation with their colleagues and their papers by which to answer charges and mount a defense, PwC’s personnel are suffering their fate in a country whose system of oversight and enforcement is immature, unpredictable and therefore extremely dangerous.

Due process of law should be expected in the official reaction to financial frauds, not the Alice-In-Wonderland policy of “sentence first – verdict afterwards.”  

Put otherwise, measured by comparison to systems evolved in their handling of corporate malfeasance, the operation of the “Indian justice system” is revealed to be as oxymoronic as the maligned Dark Ages version of the “Holy Roman Empire.”

Starkly showing the impotence of the large firms in the face of localized over-reaction, not even global PwC managing partner Sam DiPiazza’s short-cutting the World Economic Conference in Davos in favor of a hasty charm-offensive tour around the ministries of Mumbai has been able to spring the locks for his partners. 

When the dust settles and the prisoners from PwC are eventually released back to liberty, the global firms must re-assess their business model: They are over-exposed to the potential for employee hazard and business catastrophe, by the tri-fold interaction of their own uneven performance across international borders, clumsy enforcement agencies having dubious and disproportionate impacts, and porous leakage into the big-country legal systems where litigation exposures already threaten their ruin.

One potential solution, which would redound on the small-firm practitioners whose voices of hostility and criticism dominate the Indian accountancy regulator – and whose capacity to step in and carry out the challenges of a large multi-national audit engagement is precisely nil – would be to simply declare the Big Four’s services unavailable for use by local companies in the capital markets and securities exchanges of the more developed countries.

Under such a showing that “enough is enough,” the Big Four would -- both in India and other candidate countries coming readily to mind – continue with both their purely local clients and their inward referrals on local operations of global enterprises. What they would not do, however, is voluntarily expose their continued global existence to the vagaries of oversight by agencies lacking either competence or experience at that level.

The large accounting firms serve their clients, after all, as free-standing private enterprises. They are neither the nationalized minions of small-bore bureaucrats nor obliged to practice in a form of coerced servitude to hostile and chauvinistic government agencies.

They have the opportunity – as expected by their people who should deservedly be able to work without daily fear of being hauled off to indefinite imprisonment – to declare their entitlement to fair, measured and even-handed justice.

So far in India, that standard is not met.       

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Satyam's "Ghost Employees" -- An Innovative Approach to Job Creation?

On the record so far, it is safe to predict that the legal and political maneuverings around India’s Satyam Computer Services will be continue to be noisy, protracted and inefficient. But the answer will come quickly to one question:

Did or did not former chairman Ramalinga Raju loot the company by diverting the payroll of 13,000 fictitious employees, out of some 53,000, as alleged by prosecutors and, as of today, at least, denied – or at least not admitted – by both Raju himself and the company.

Whatever the answer -- with its broad implications for the company and its shareholders and gate-keepers, as well as for Indian governance and regulation of companies and their auditors – the process to get there should be rapid.

The investigative work program to unpack such a charge could be written by a second-year auditor – once again exposing that the roadmapped mopping-up of “forensic accounting” relates to the challenges of contemporaneous financial auditing as does the slog of post-battle casualty clearance to the smoky uncertainty of real-time warfare.

Legitimate employees demonstrate their presence far beyond their ID numbers and payroll entries, however susceptible to manipulation those high-level records may be. There are company accruals and payment obligations for taxes, social charges, pensions and benefits. They create hiring and departure dossiers. They occupy real office space, work stations, telephones and computers – all requiring the documentation and outlay of considerable real sums. And as alleged, a 25% padding of their rosters would affect everything in a company environment from cafeteria turn-over to usage of paper towels to the frequency of parties for maternity leaves.

What would have been in it for Raju to bear the cost side of over-stating his employee head-count? All the associated expenses, if fictitious, could have been exposed by a walk through a job site or an expense ledger. While if real, they would have been an impossible drain on the company’s margins – not to mention requiring a team of co-fraudsters to dummy up the records.

Volume padding is one of the oldest corporate scams. Barry Minkow created bogus job locations in the 1980’s to boost the turn-over of ZZZZ Best – but that Ponzi scheme was aimed at inflating the public company’s stock price. And a decade earlier, the perpetrators at Los Angeles-based Equity Funding used the unusual device of over-stating liabilities (to pay death benefits on non-existent insurance policy holders) – but they found a way to extract a pyramid of real cash through the use of reinsurance.

So there was the rub for Raju, and the challenge to the prosecutor’s assertion: ghost employees don’t generate revenue.

Or do they?

Padded jobs rosters, inflated client billings and systematic over-charges are also devices as old as time, as any manager knows who has ever pushed back against a service provider’s generous billing.

To realize revenue on the scale alleged in Satyam, however, would require a massive fabrication of client billings, at the very least – even if disconnected from legitimate employee numbers and expenses – plus the possibility of warehouses full of bogus time records and other job-related footprints. Again, all of this was subject to ready exposure through the most elementary form of inquiry and verification – whether by a client, internal auditors or outside monitoring and scrutiny.

Or is it the case, despite the world’s largest companies on Satyam’s client roster, presumably exercising some level of due diligence in bench-marking Satyam’s staffing and employee productivity against its peers, that the entire Indian out-sourcing industry is so lacking in basic control and oversight mechanisms that irregularities so allegedly pervasive – and, necessarily, collusive – could escape detection for so long.

The implications of that speculation will await exploration when the post-battle forensic hyenas have finished their scavenging. For now, expect that the porous nature of the Indian investigative process, which has already furnished so much to chew on, will continue to serve up a buffet of future morsels.    

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Fraud Outsourced to India: Satyam Computer Services -- Is it Enron, or Parmalat?

As this blog celebrates its first birthday, there are two related reasons why I am unconcerned about the supply of new material for its second year.

To start, the crystal ball seems fully functional – based on my calls of December 16 promptly coming good – here – “two predictions as the Bernard Madoff story brings a sorry year to its welcome close:”

    “The first is the safe but unfortunate bet …that at least one remorse-driven suicide will further color an already tawdry tale.

    “The second is that before the books are closed on the reporting of dismal corporate results for 2009, an entirely new multi-billion dollar operational and accounting scandal will erupt somewhere in the world – outside the investment scams and the already battered financial services sector.”

The first was sadly realized within the week – here – with the self-inflicted death in New York of French fund manager Rene-Thierry Magon de la Villehuchet.

As for the second, yesterday's resignation of Satyam Computer Service’s Ramalinga Raju, in a letter to his board confessing cash manipulation and a balance sheet inflated on the order of $ 1 billion, introduces large-scale public company scandal in a new region of the world, with consequences that will reverberate all around.

In addition, my belief in web-based communications and the developing capacity to inform and shape serious discussion of complex issues is reinforced by the emergence of new and innovative means – in particular, the launch by Bruce Carton, at his enormously informative Securities Docket, of the Securities Litigation and Enforcement Channel, with Tuesday’s webcast, “The 2008 Year in Review” – linked at his site and well worth a listen.

Bruce’s contributors were four experienced and insightful bloggers -- Kevin LaCroix (D&O Diary), Tom Gorman (SEC Actions), Francine McKenna (Re: The Auditors) and Walter Olson (Point of Law) -- all on my list of valued resources and worthy of attention.

As noted, the two events are related, in this way: During the webcast, the unsurprising outcome of a listeners’ poll on compelling issues for 2009 was that the risk of “Big Four auditors at the brink” was only a distant trailer. 

But that indifference is incorrect, as is about to be shown by the world of hurt quickly to fall on Satyam’s auditors, PricewaterhouseCoopers.

Comparisons with Enron and Arthur Andersen are being drawn, but are mis-placed unless PwC in India somehow manages a similarly self-inflicted indictment. For the post-scandal environment, the better comparison is with Parmalat, the family-controlled Italian dairy conglomerate whose € 20 billion “black hole” in 2003 has since swallowed up careers and treasure at both its audit firms.

The reason is that India, like Italy, is an immature venue for the handling of large-scale financial scandal – which makes the possible reactions of its regulators and politicians both unpredictable and extremely dangerous.

In Parmalat, Italian bankruptcy legislation was re-written after the fact, to enable a newly-empowered special administrator to pursue civil claims both at home and abroad – which he has done with enthusiasm to the tune of nine-figure settlements from Deloittes and proceedings still on-going against Grants.

Meanwhile that country’s antiquated and ponderous criminal justice system is unlikely to complete its prosecutions within the lifetimes of any of its targets – thus displaying an inability with credibility to render either punishment or deterrence.

Because even the scandal-scarred American experience has included the pell-mell excesses of the Sarbanes/Oxley law of 2002 and the Public Companies Accounting Oversight Board, can better be expected from public servants in India, never before exposed to corporate mischief on this scale?

In Satyam, the Ministry of Corporate Affairs, the Securities and Exchange Board and the accounting regulator, the ICAI, have all rushed to announce investigations – processes that, in a country lacking a base of experience with the scrutiny and exposure of serious financial manipulation, will make the posturings of America’s comical Henry Waxman look positively statesmanlike, and will more closely resemble a concoction of Gilbert & Sullivan.

While PwC’s practice in India will be put at risk for its personnel, its permission to practice and its very survival – along with whatever litigation risk may lurk in that country’s untested civil system -- there is the double-whammy of globalized shareholder litigation exposure for multi-national enterprise. Because Satyam’s securities included ADR’s traded on the New York Stock Exchange, the first of an anticipated parade of class actions was already filed on the very day of the company’s downfall.

Mumbai is so far from the American media centers, whose attention to financial scandal is short-lived and US-centric in any event, that Satyam will be a one-week story in the mainstream spotlight.

So although the company’s name may indeed be “truth” in Sanskrit, the amount extracted from the story will depend on those staying with it. Here, it’s the bet that the consequences of Satyam for PwC will be protracted, disruptive and expensive – with onward effects for the entire large-company assurance franchise.

And for those tempted to disagree – I have been two times right in the last month alone.

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