ICAI President Ved Jain said here on Saturday that Pricewaterhouse and its practices were `non-transparent' and this was exposed after the Satyam scam. Jain said the auditing firm had landed in a mess only because of confusion created by its own functionaries.
Speaking to STOI during his visit to the city for the inauguration of ICAI's centre of excellence, Jain said, "They are confused about their identity. After a tie-up, the local firms claim they work independently and have nothing to do with their foreign operations. But when they approach clients they use their global firm tag. That is the problem."
He, however, said ICAI would not be able to take any action against Pricewaterhouse partner S Gopalakrishnan who is a council member of ICAI. Jain said the institute was not permitted by law to take any action against a council member. "We can only dismiss a member if he is convicted and Gopalakrishnan has not been convicted yet. The member can also decide to step down voluntarily but that does not mean we can force someone to do so," he said.
The ICAI president did not meet the PW partners or any other official from the firm during his visit to the city.
Speaking on the issue of banning the big four from auditing in India, the ICAI chief said the issue had been taken up with the government and that a decision was likely soon. He said that the institute had written to the government regarding this in the past too but nothing had been done. He is, however, hopeful that the government would take stock of the situation this time around.
"We have expressed our disapproval of this arrangement on several occasions. In 2005 we had also sent a letter to the government seeking an end to this practice of foreign firms functioning through tie-ups with domestic companies,'' said Jain.
To a question on how these firms were allowed to function for so many years without any objection from ICAI until recently, Jain said that "their actions were constantly questioned and now they are finally facing the music for their deeds."
Citing the ban on Indian auditing companies to practice abroad as another reason why India should restrain these firms from local tie-ups, Jain said, "Why should they (foreign firms) be allowed to audit in our country when we cannot practice abroad? Even this surrogate way of functioning (through local firms) needs to end," he said adding that these firms do not even have permission from RBI to audit in the country.
When asked why ICAI did not insist on this after the Global Trust Bank fiasco, Jain said that the matter had been under consideration since then but could not be given shape due to "cumbersome procedures" that had to be carried out.