ICAI Investigates Pricewaterhouse Auditors Over Fraud Allegations

Investigation into Pricewaterhouse Auditors Amidst Allegations

The Institute of Chartered Accountants of India (ICAI) is currently investigating allegations of fraud against auditors from Pricewaterhouse in relation to the Satyam and Global Trust Bank (GTB) cases. Notably, a senior auditor from Pricewaterhouse, involved in both audits, continues to serve on the ICAI council, raising concerns among industry professionals.

Ongoing Investigation by ICAI

Sources indicate that this senior auditor has emerged as a suspect due to his role in the GTB audit team. The disciplinary committee of ICAI is scrutinizing the actions of Pricewaterhouse’s audit team for alleged negligence in auditing GTB’s financial statements and for failing to identify the bank's significant levels of non-performing assets (NPAs).

The investigation into the GTB case has spanned three years, yet ICAI has yet to reach a conclusion. ICAI President Ved Jain attributed the slow progress to the provisions of the Chartered Accountants Act (CA Act) prior to amendments made in November 2006. Jain explained, “The 2006 amendment facilitates a quicker completion of disciplinary proceeding; however, the GTB case predates this amendment, which has resulted in delayed progress.”

Continued Involvement of the Auditor

Amidst this ongoing investigation, the senior Pricewaterhouse auditor remains a member of the ICAI council, which oversees the management of the institute's operations. Additionally, this auditor is now believed to be embroiled in renewed scrutiny for his involvement in the Satyam audit, raising further questions about his suitability to occupy a position on the council during ongoing inquiries.

This situation has provoked frustration among several senior chartered accountants, who have requested anonymity while expressing their concerns. They question the ICAI’s decision to retain an auditor linked to two contentious audits during active investigations. “It is concerning that an individual associated with two questioned audits is still allowed to sit on the ICAI council, particularly with ongoing inquiries regarding these matters. Quick action from ICAI on the GTB case might have prevented this auditor's involvement in the Satyam audit, which is now also under scrutiny,” they remarked.

Reports suggest that the Pricewaterhouse auditor also chairs one of ICAI's non-standing committees, adding another layer of complexity to the situation.

Conclusion

The ongoing investigations involving Pricewaterhouse auditors continue to raise significant questions about governance and accountability within the auditing profession. As ICAI progresses with its inquiries, the ramifications of these cases will likely influence future regulations and standards in auditing practices.