6 days ago
India's financial regulator, Securities and Exchange Board of India, has banned financial services firm PriceWaterhouse Coopers from from auditing listed companies in the country for two years. PwC is accused of failing to spot fraud of over 1.7 billion dollars at defunct tech firm Satyam Computer Services. The auditor is said to have failed to uncover irregularities in Satyam's accounts over several years. These were subsequently revealed in 2009, by the then Chairman, Ramalinga Raju, who admitted to inflating Satyam's profits with "fictitious" assets, non-existent cash and misreporting of debts the company was owed. He was sentenced to seven years in jail along with nine co-conspirators in 2015. The regulator, in its ruling, says that PwC overlooked "several red flags.... which were all too obvious for any reasonable professional auditor to miss". This adds to the number of cases where financial services firms are facing issues of integrity as has been seen with KPMG and Deloitte.