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ICAI to serve showcause notice on PwC soon

January 09, 2009 16:17 IST
Last Updated: January 09, 2009 16:25 IST

The Institute of Chartered Accountants of India will serve showcause notice on PricewaterHouseCoopers by Saturday and ask for a report on the auditing done by it for Satyam [Get Quote] Computer in a fortnight.

Meanwhile, company secretaries' body ICSI is also writing to the company secretary of Satyam Computer today to submit a report on corporate governance in a week.

"Our disciplinary committee will serve a show-cause notice to PwC either today or tomorrow and will ask them to submit a report within 15 days on all the auditing done by them on Satyam Computer's accounts," ICAI President Ved Jain told PTI.

ICSI president Keyoor Bakshi said the government had earlier asked the institute to look into the revelations made by Satyam Computer's founder President Ramalinga Raju.

Jain said eight members sent by the government to inspect the accounts of Satyam Computer are government officials and none belongs to the ICAI.

The government has rushed an eight-member team to Hyderabad to help in investigations of the financial fraud by the IT major Satyam Computer Services, whose founder B Ramalinga Raju admitted to having falsified accounts, corporate affairs minister Prem Chand Gupta had said earlier in the day.

Jain said action against CAs who have audited the accounts of Satyam Computer can be expected in 2-3 months if found guilty.

However, the institute cannot take action against PwC.

He said the institute would expedite the process this time as the amendment of the Chartered Accountants Act in 2006 has enabled the ICAI to cut the investigation time short.

CAs found either negligent or party to the fraud could face a life-time ban on practising, Jain said.

Asked why has it taken the ICAI more than three years to take action against auditors of Global Trust Bank, he said because it is because the Act was amended in 2006 to provide expeditious completion of disciplinary action.

Jain said Raju's statement that only he knew about the financial wrong-doing did not look like the whole truth, as he did not write the accounts of his company.

B Ramalinga Raju in a letter written to the board admitted, ". . .None of the board members, past or present, had any knowledge of the situation in which the company is placed."

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