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PwC auditors held for Satyam fraud
January 25, 2009
SPOTLIGHT
Corporate Corner
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A chilling similarity between Satyam and Parekh lies not just in the scale of the frauds but also the incidence
of criminal conduct by the top management of the various companies involved and the conflicting interests
between the various groups of accountants, bankers, auditors and top management. An inescapable factor is
the clearly questionable auditing standards at large and the professional ethics generally of the auditors who
have supposedly audited the company's books for at least the last four to five years.
The fundamental question that needs to be asked of the audit and accounting firm, Price Waterhouse in this
India
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case, is - why was there such a critical absence of, or failure to enforce, control systems and/or audits in
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The fact that the Satyam fraud went on undetected and uncorrected for years and without any external audit
http://articles.economictimes.indiatimes.com/2009-01-24/news/27653809_1_auditing-satyam-fraud-satyam-scam
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26/01/16, 15:06
meaningful corporate governance within the company both in terms of the directors and senior management
unable to evaluate and review existing internal control systems through established internal audit functions
and/or to implement, enforce, refine and improve upon such internal control systems.
A thorough investigation by the relevant authorities and an effective legal prosecution is the order of the day as
it will ensure that honest and correct auditing and accounting methods take precedence, that best practices are
meaningfully adopted and followed by audit firms and that the problems of corporate governance are genuinely
redressed as opposed to the mere issuance of guidelines that some fail to follow.
(The author is a research fellow, Brunel University, UK and International Banking Regulations
Consultant with PDS & Associates, an India-based Law Firm)
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http://articles.economictimes.indiatimes.com/2009-01-24/news/27653809_1_auditing-satyam-fraud-satyam-scam
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