ICAI bars 2 auditors linked with Satyam scam for life
December, 07th 2011
Two auditors involved in the multi-crore Satyam fraud have been barrred from attesting financial statements for life, apart from facing a financial penalty, by auditing regulator Institute of Chartered Accountants of India (ICAI). However, inquiry against top two audit partners of Price Waterhouse - S Gopalakrishnan and Srinivas Talluri - is yet to come to a conclusion.
Chintapatla Ravindranath and P Siva Prasad - who worked for Lovelock & Lewes (an affiliate of Pricewaterhouse India) - were audit managers who performed the statutory financial audit of Satyam Computers between April 2001 to September 2008 on behalf of Pricewaterhouse India.
The duo's names have been removed from the members' register of ICAI permanently, which means they cannot attest financial statements for life. Also they have been slapped with a financial penalty of Rs 5 lakh each, which is the maximum penalty permissible under law. Sources say this is perhaps the first time when the action involves both permanent de-rostering and also a financial penalty.
The CA institute's disciplinary committee had met on Monday to consider the matter. The committee, that had also heard the accused, found "serious gross negligence" on the part of the two CAs in the discharge of their duties as audit team members. Siva Prasad had conducted the audit from April 2001 to March 2005, while Ravindranath had performed it from April 2005 to September 2008. Both were employed with Lovelock & Lewes, Kolkata, and deputed to carry out the audit in the name of Price Waterhouse, Bangalore.
The hearing in the matter of other respondents who were heading the team - Gopalakrishnan and Talluri - and Satyam's ex-CFO V Srinivas are yet to be concluded.
The same is the position in the case against VS Prabhakara Gupta, ex-internal audit head of Satyam. Sources said the delay was because they were in judicial custody for a long time and thus could not be questioned. Also, some of them had gone to court challenging ICAI's disciplinary proceedings against them.
ICAI now plans to resume disciplinary proceedings against all the other accused auditors this month, sources said. However, it will have to wait to do the same against Gupta who has got a stay from the Andhra Pradesh High Court.