Icai Serves Showcause Notice On Pricewaterhouse

Chartered accountants body ICAI on Saturday served a showcause notice on auditor PriceWaterhouse and asked it to submit balance sheets of Satyam Computer audited by it in the last five years. "We today served showcause notice on PriceWaterhouse and asked it to reply within 21 days," Institute of Chartered Accountants of India (ICAI) President Ved Jain told a news agency. If the reply to the notice does not come by 21 days, all members of PriceWaterhouse who audited the Saytam accounts could be banned for life time, Jain said. The firm has also been asked to submit balance sheets, financial statements and other relevant documents of Satyam Computer audited by it for the last five years, he said. The audit firm has maintained that it followed applicable audit standards and went by audit evidence provided by the company. The ICAI President said action against CAs, who audited the accounts of Satyam Computer, can be expected in 2-3 months, if found guilty. However, the institute cannot take action against the firm, he said. Jain said the institute would expedite the process this time as the amendment of the Chartered Accountants Act in 2006 has enabled ICAI to accelerate the proceedings. CAs found either negligent or party to the fraud could face a life-time ban on practising, Jain said. The institute has taken action against 122 CAs for various kinds of irregularities in the last three years with one of them even being barred for life time, he said. Jain said Satyam founder Ramalinga Raju's statement that only he knew about the financial wrong-doings did not look like the whole truth, as he did not write the accounts of his company. Ramalinga Raju in a letter written to the company 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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