On account of Satyam, global team to review PwC’s India audit

MUMBAI: Pricewaterhousecoopers (PwC) plans to bring in partners from its international affiliates to do an independent audit of its clients in India, besides what is being done by its Indian partners.

The move is part of the global consulting major���s proposed image-building exercise in the country after its audit arm Price Waterhouse was brought under the scanner for its alleged role in the Satyam fraud.

Indeed, this is the first time that PwC would be conducting such an exercise in India. The move is aimed at preserving its position in the high-stakes India market, its fastest-growing globally, and a key one for rivals such as Deloitte, Ernst & Young and KPMG.

���We want to convince our stakeholders that the processes at PwC are of the highest quality,��� PwC Global CEO Samuel DiPiazza, who is currently in Mumbai, told ET in an exclusive interaction.





The firm has already changed its assurance leadership team and now plans to form a new risk-management group. The move to bring foreign partners is somewhat similar to the peer review process initiated by market regulator Securities and Exchange Board of India (Sebi), after widespread criticism of the auditor���s role in the Satyam fraud.

Co takes steps to protect business interest in India


While SEBI wants an external audit firm to verify and cross-check an audited balance sheet, PwC plans to do an internal review to erase any possibility of error. The consulting major, which is the largest among the Big Four, is taking other measures to protect its turf in India.

Last week, after announcing a plan to form a fivemember advisory board to guide its India office, PwC has named Gautam Banerjee, a senior partner at its Singapore office, to be PwC���s representative on the advisory board. The other four members would be independent non-PwC members. Last year, PwC audited about 140 Indian companies, most of which belong to the top 50 of the BSE���s broader index.

It is also one of the oldest foreign accounting firms to set up business in India. PwC, in the past two years, has built its presence by merging local chartered accountancy firms with itself. Three years ago, the firm had suffered a similar dent in reputation in Japan, where it was forced to shut down its affiliate after its alleged involvement with scandal-hit stockbroking firm Niko Cordial.

The firm plans to take prompt corrective action in India. ���The investigations (into the Satyam fraud) are on and I would not like to comment on that. However, the situation here is different from that in Japan. There we walked away, while in India we want to stay,��� Mr DiPiazza added. The Hyderabad office of PwC, which is at the core of the Satyam investigation, will see a major makeover.

The two partners who signed on Satyam���s balance sheet ��� S Gopalakrishnan and Srinivas Talluri are currently in prison ��� have been suspended. PwC plans to bring in partners from other offices in India for leadership roles at the Hyderabad office. There are also plans to bring in foreign partners. Mr Gopalakrishnan is due for retirement by end-March, while Mr Talluri will continue to remain a partner of PwC.