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February 13, 2009

Comments

Kusum

I agree with James's views completely. To add to what he points out so very well in his various posts:
1. There is no concrete evidence with the authorities to prove that PwC or its partners were involved in the whole scam.

2. Any person who is familiar with the audit process will realise how difficult it is to answer any query without your workpapers, specially for a gigantic company like Satyam and for the past seven years too. The authorities expect them to have a fabulous memory!!!!
3. People should also remember the phrase, "Innocent until proven Guilty". The partners have not yet been proved guilty, hence people should stop making assumptions of their guilt.
4. Pulling off a scam of such proportions, as is being claimed by Raju (not yet proven), takes the involvement of many regulatory authorities, it is not enough for the auditor to sign off the balance sheet and be done with it. Why don't they put behind bars all the officials of such regulatory authorities who failed to do their job? the taxation guys being the first!
5. It is being claimed by Raju that there was no money with the company, it has not yet been proven.

Ramakrishna Y

I reproduce the relevant information from The News Report of of Times of India:

Please refer : http://timesofindia.indiatimes.com/Hyderabad/PwC_auditors_aware_of_Satyam_fraud/articleshow/4031368.cms

Quote:

PricewaterhouseCoopers (PwC) auditors manipulated Satyam Computers accounts for money.

According to Crime Investigation Department (CID) sources, Satyam founder B Ramalinga Raju and former chief financial officer (CFO) Vadlamani Srinivas confessed that the auditors of PwC were aware of the fraud and very much involved in executing it.

“Five banks, including HDFC Bank and BNP Paribas, replied to our queries saying that the reconciliation statements of the fixed deposits shown by Satyam Computers at auditing were not issued by them,” a CID officer, who is part of the investigation team, told TOI on Sunday.

According to CID sources, S Gopala Krishnan, who was the auditor for Satyam Computers on behalf of Price Waterhouse between 2000-2001 and 2006-2007, and Srinivas Talluri, the auditor for 2007-2008 fiscal, were well aware of the fraud.

“The auditors falsified accounts,” the CID officer said.

During the grilling by CID officials, Rajus and their CFO V Srinivas reportedly told their interrogators that they had paid handsomely for manipulation of accounts.

“The normal charges could be about Rs 1.5 crore per month,” a source said.

"More details will come out when IT officials start their probe on the income and investments of the arrested individuals," the CID official said.

Several dedicated teams of CID are working on the Satyam issue. According to the sources, one team has focussed on apprehending Akula Rajaiah and Suryanarayanaraju, who have `been out of reach' since searches at SRSR Advisory services office on January 21.

Above is the evidence requested by Ms. Kusum. No doubt it will be produced in Court in due Course
and given due consideration by the Learned Judges.

The whole affair just 'stinks'

Kusum

If Mr. Ramakrishna thinks that a news paper clipping is proof of a person's guilt, I have nothing further to tell or educate him about.

For information:
Point One:
The CID had claimed that PwC partners confessed to the fudging of accounts. Later PwC issued a media statement that the partners had never made any such confession and a copy of their response to the CID was also shown on the media proving that what CID earlier claimed was wrong.

Point Two:
Auditors don't prepare the books of accounts of the financial statements, hence it's not them who can fudge the accounts, if anything, they can only certify fudged accounts. The whole idea of auditors fudging the accounts should be preposterous to anybody who knows an iota of auditing and accounting.

Point Three:
Why don't we ask the IT authorities to check about the interest income being reflected by Satyam for the past few years. The same IT department which could not trace the fudged false interest income being reflected by Satyam is now going to check the investments of the individuals!!!

Well let's blame the auditors for all the errors in the accounts. They are guilty!!!! I totally agree. Let's not apply our brain for the other possibilities! We have to blame someone, so why not the statutory auditors as they are a big public name. All others involved, the INTERNAL AUDITOR, THE COMPANY SECRETARY AND THE INCOME TAX ASSESSMENT OFFICER, THE BANKERS, they all are innocent babes with halos around their heads!!

Y Rsmakrishna

Indeed, all the others viz.the INTERNAL AUDITOR, THE COMPANY SECRETARY AND THE INCOME TAX ASSESSMENT OFFICER, THE BANKERS, they all are innocent babes with halos around their heads!!
Just as the auditors 'relied upon' the information furnished by their esteemed clients - the others relied upon the Report of a very reputed firm of auditors!

Kusum

Some accounting and auditing details which I would like to share with the uneducated in the field of audit:

1. The statutory auditor RELIES on the work of the internal auditor and not the other way round.

2. The statutory auditor RELIES on the certificate from the company secretary not the other way round.

3. The company secretary prepares all the board resolutions for deposit of fixed deposits, bank signatures, etc. Not the auditor, he just checks them.

4. The statutory auditor relies on the bank statements, bank confirmations, remittance certificates from the bankers, not the other way round.

5. The income tax officers are supposed to cross check the interest income and TDS details with the confirmations from the bankers, not with the auditors.

The people making all kinds of allegations against the auditors because they are a Big Name should stop relying completely on the over hyper media and should realise all the finer points that are needed in carrying out a scam of this proportion.

Skanda Swamy

I read your article implying your "high and mighty holier than thou" United States being more "just and fair" than the biggest democracy in the world using a heavy hand in imprisoning not only the Satyam debacle perpetrators, but the auditors who, in your view just "had their hands full" instead of being full partners in crime.

In India, even a former Prime Minister was imprisoned for fraud.

George Bush routinely flouted constitution. Dick Cheney shot someone in the face and got away with it. (Accident? Imagine what would have happened if you or I committed that "accident"?)

With the recent "stealing" of $700 Bn taxpayer money and bailing out of Goldman Sachs and AIG by the "honest" people in high places in the US government, do you still believe that we are "just" in this country, with our laws being fairly and impartially being applied, not just to the common man, but to the biggest crooks in our society? Where is the bailout to the people who have landed on the streets due to foreclosure?

I am sure our laws are very effective in giving some parking tickets, and collecting taxes on tips from restaurant workers, but where is the law when the biggest crime of the century is committed?


Jim Peterson

Mr Swamy -- Events have clearly evolved some since I wrote this post in February, and not necessarily for the better. With thanks for your thoughts, I have reflected some reactions in a post of August 9.
Jim

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  • © 2007-2019 James R Peterson Special thanks: Francine McKenna. Always with love: Kat and Julie. In memory: Bob White, Stuart Kadison