The Institute of Chartered Accountants of India (ICAI) has passed a disciplinary order against Price Waterhouse & Co, New Delhi and its network firms for professional misconduct.
The order, dated May 8, has also removed two members from the register of members for a period of three years with a fine of Rs 5 lakh each.
During its investigation, the ICAI committee noted that the visiting cards of the personnel of Price Waterhouse & Co, New Delhi contains suffix “@pwc.com” in their emails which depicted their close association with the international entity.
Further, the committee said that name licensing agreement signed between PwC Business Trust (an entity set up under the laws of US and owner of the brand PricewaterhouseCoopers) contains clauses which permits Price Waterhouse & Co, New Delhi to use the trademark PwC.
“The respondent firm in their submissions have failed to point out as to how they were able to maintain their independence when the domain that was being used belonged to the third party i.e. multinational entity.
“The respondent firm with the name Pricewaterhouse used domain name “@pwc.com” which signify its relation with multinational entity to capitalise on their goodwill and such acts constituted professional misconduct of the first schedule to the Chartered Accountants Act, 1949,” the ICAI order said.
The order said that ICAI’s disciplinary committee has already found out an apparent sharing of human resources, infrastructure, brand name and contact details which signifies that in substance PwC was controlling Price Waterhouse & Co, New Delhi and network firms.
Prior to PwC and its domestic affiliates, the ICAI had passed an order against major audit firms — SR Batliboi & Co and others — for violating the CA Act. Though the order against EY affiliate firms was later removed from ICAI’s website following a stay order from the Delhi High Court.
In reply, Price Waterhouse & Affiliates said, “We are disappointed to note that the ICAI has published the said orders in the public domain, which is not in accordance with the court proceedings before the Hon’ble Delhi High Court, which was held in the presence of the ICAI Disciplinary Committee counsel.
“We have accordingly asked the ICAI to immediately take down the orders from their website. These matters are of course not unique to us but are general industry-wide issues, and do not in any manner pertain to our audit procedures or the quality of our delivery. We remain steadfast in our commitment to respect and adhere to applicable laws and have full faith that our judicial process will uphold our position on the said matters.
The ICAI has long maintained that being part of a global network hampers the independence of domestic audit firms affiliated with global Big Four. Such affiliations also result in fee sharing with the international network which is against the CA Act.
The Big Four, on the other hand, have argued that the global affiliations help in capacity building and develop common tools, tech platforms, training modules and governance structure.
