Pls forgive the TYPO for “collusion” in previous article

In my Opinion PWC has failed miserably.

They were relied upon to Plan their engagement and review the books of SATYAM as prescribe by the relevant Auditing Standards and thereafter provide an opinion as to whether the Financial Statements are free from misstatements.

The fact that their procedures did not bring any irregularity to light then one have to think about their planning.

Did PWC took a risk based approach to this engagement?

What if RAJU did not confess this misgiving howlong it would taken the Big 4 auditors to reveal these findings given that they did.

Frauds of these nature cannot be avoided due to collution and other like strategy. But when they do occur As an investor i will be happy to know that they were caught by a system thats is set up to reveal just that.

The auditors did not assume the “watchdog” responsibility so they are stuck between a rock and a hard place.

Hope this is not too wordy…

Regards,

Julian

One thing for sure is that Auditors are not liable because they express a mere “opinion”. I believe forensic accounting should pave the way as it relates to investment and determining stock prices.

Accounting princples are subjective and Satyam is my case in point. You know as an CA that any Inflation in Sales or tampering with Valuation of stock or COS impacts the reported earnings per share instantly.

I am a CA too but i am in the Non profit Sector so my terminology might be somewhat off.

would be happy to hear your thoughts.

Regards,

Julian

IMHO, it is not only PWC the credibility of whom would have taken a dent in this episode but also every single audit firm as Investors’ “take for granted” confidence on audited financials should have taken a dent.

In my personal experience, recently I got a mail from a Investment Analyst firm reiterating their “invest” stand on some other Company who has declared excellent results. I saw the results which are very good and the stock is at mouth watering price levels. In other times, I would have simply gone on to buy that stock. Now? I have sent a mail back to the analyst asking him one question, “how much reliable are these numbers”. I think more and more investors will ask this question.

I am disappointed that the primary trust on auditors that they are representatives of the shareholders has taken a beating. And it is not entirely auditors fault. It is also the fault of the investing public and the shareholders. How many times have we seen shareholders getting up and querying auditors regarding the accounts.

This episode may well start that trend. But with it, there might arise a situation of shareholder corruption. – Companies wooing shareholders to keep their mouth shut.

Thanks for you response,

How about PWC and their credability now. How can investors feel secure having them as “watchdogs”.

Does this Scenario contributes in any way , shape or form to them loosing public confidence.

Regards,

Julian