News shortcuts: From the Courts | Top Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | Professional Updates | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax | PPE Safety Kit SITRA Approved | PPE Safety Kit
« Top Headlines »
 ITR filing deadline for FY 2019-20 extended till November 30
 Amendment of rule 31A, Form 26Q & 27Q
 5 key tax-related updates you need to know
 New TDS rates on high-value cash withdrawals apply from today. Know the details
 I-T department extends deadline for 2019-20 tax saving investments to July 31
 Income-tax (13th Amendment) Rules, 2020
 Filing tax return for the 1st time? Here's everything you need to know
 7 changes in income tax rules you need to know
 Extension Of The Income Tax Return Deadline For Year Of Assessment 2020
 Income Tax Return filing for FY2019-20: Here is all you need to do before filing your ITR
 Filing belated income tax return for 2018-19? Here is how you can file it online

Satyam's fee to PwC under lens
January, 12th 2009

The Pricewaterhouse Coopers (PwC) story, as far as Satyam Computer Services is concerned, is clearly not going to get over in a hurry. Recent events may result in PwCs fee from Satyam coming under the scanner.

Between 2003 and 2008, its audit fee from Satyam increased three-fold. Other companies in the information technology (IT) sector have not increased their payments to their auditors, at least not to this extent. PwC received a consolidated audit fee of Rs 4.3 crore for the financial year 2007-08 around twice as much as what Satyams peers in the IT industry, on an average, pay their auditors.

For the financial year ended March 2008, Infosys paid a total auditor remuneration of Rs 1.53 crore on a consolidated basis, while the corresponding amount that Wipro paid its auditors was Rs 2.8 crore. Tata Consultancy Services (TCS), the largest Indian IT company, paid only Rs 2.77 crore as auditor remuneration. Thus, for Satyam, the auditors remuneration on a consolidated basis at Rs 4.3 crore is almost 1.5 times that of Wipro and TCS and three times more than what Infosys paid its auditors.

Even on a standalone basis, Satyam stands out since it paid out a total of Rs 3.73 crore as auditor remuneration.
According to a chartered accountant, the audit fee that is paid out typically depends on the complexity of the task at hand, the number of countries in which the company is listed and the growth in topline numbers. The companies that are considered Satyams peers Wipro, Infosys and TCS are all listed in the overseas markets and have to adhere to international accounting regulations.

Interestingly, the fee that PwC received for FY08 is part of a trend over the past few years as well. In 2003, it received Rs 1.52 crore from Satyam as statutory audit fee on a consolidated basis and Rs 65 lakh on a standalone basis. In the same year, Infosys paid out a much lower Rs 32 lakh to its auditors BS Raut and KPMG on a standalone basis and Rs 34 lakh on a consolidated basis. Wipro paid a consolidated auditor remuneration of Rs 85 lakh in that year. By any measure, the audit fee paid by Satyam is far more than what its peers pay.

With the constitution of the new board having just been announced, the fate of PwC remains uncertain. Interestingly, the Companies Act of 1956 says the remuneration of an auditor appointed by the board or central government may be fixed by the board or the central government as the case may be. As things stand, it is clear that a lot of factors will be considered before a decision on Satyams audit practices is taken.

PwC received an audit fee of Rs 4.31 crore from Satyam for FY08

Wipro paid Rs 2.8 crore to its auditors, while Infosys and TCS paid Rs 1.5 crore and Rs 2.8 crore respectively

PwCs fee from Satyam has increased three-fold since FY03

Home | About Us | Terms and Conditions | Contact Us | PPE Kit SITRA Approved | PPE Safety Kit
Copyright 2020 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting