Two auditors from PricewaterhouseCoopers’ Indian member firm have been charged in the Satyam accounting scandal.
Auditors S. Gopalakrishnan and Srinivas Talluri were both charged in the case involving Indian technology outsourcer Satyam Computer Services, which has been accused of perpetrating a massive accounting fraud that has been dubbed “India’s Enron.”
Also charged in the case were Satyam founder and former chairman Ramalinga Raju, former chief financial officer Vadlamani Srinivas, vice president of finance G. Ramakrishna, senior finance manager D. Venkatapati Raju, assistant finance manager Srisailam Chetkuru, former managing director Rama Raju (Ramalinga’s brother), and director B. Suryanarayana Raju.
Satyam’s share price plunged after the chairman admitted in January to falsifying over $1 billion worth of assets on the company’s books (see Indian Outsourcer Admits Massive Accounting Fraud and How Satyam Kept a Major Scandal Under Wraps).
India’s Central Bureau of Investigation said that it had interviewed 433 witnesses and examined about 65,000 pages of documents before filing 300 pages of charges, including allegations of criminal conspiracy, cheating and forgery.
Pricewaterhouse India said that it was surprised and disappointed by the charges against its auditors. “The fraud perpetrated by Raju and his cohorts was designed to and did circumvent Pricewaterhouse India’s audit process,” said a statement from the firm. “The two Satyam audit partners, and Pricewaterhouse India, were victims of that fraud.”
Since news of the scandal broke earlier this year, PricewaterhouseCoopers has announced massive changes in the structure of the Indian member firm, according to The New York Times. It is adding a five-member advisory board in India, a new head of risk management from outside India, a new auditing team in India, and a change of management inside the firm’s Hyderabad office.
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