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News >> Technology >>
PWC's role shackles investors trust on auditors
By siliconindia
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Friday, 16 January 2009, 02:58 IST
Mumbai: The auditor's role in a company has lost its prominence with the PricewaterhouseCoopers (PWC) resorting to an inadequate statement about the cooked-up balance sheet of Satyam. "Ramalinga Raju has stated that the financial statements of Satyam have been inaccurate for several years. Consequently, our opinion of the financial statement may be rendered inaccurate and unreliable," said PWC.
The company has been auditing for Satyam since last seven years, yet the inability to provide valid reasoning about the fraud is not being accepted by the investors. "In that case, why is any audit done in the first place?" Consultant Gul Tekchandani told Business Standard. It is also a concern that the auditors are supposed to get a third-party confirmation of the statements given by the company before giving their 'true and fair' view. It is also revealed that the auditors normally take the accounts of companies at their face value, especially the bank statements.
According to most chartered accountants, auditors should be doing a third-party confirmation like going to banks directly to verify the statements. In fact, nowadays auditors also check the financial software being used by companies. "Though the primary responsibility lies with the company to prepare the financial statement, the verification has to be done by the auditors always. I believe that is what they are paid for," said a Chartered Accountant.