Within days of Sebi passing order against Price Waterhouse network entities in the Satyam scam, chartered accountants' apex body ICAI today said it had awarded maximum punishment to individual auditors involved but has no powers to initiate disciplinary action against CA firms.
Within days of Sebi passing order against Price Waterhouse network entities in the Satyam scam, chartered accountants’ apex body ICAI today said it had awarded maximum punishment to individual auditors involved but has no powers to initiate disciplinary action against CA firms. On Wednesday, Sebi imposed a two-year ban on Price Waterhouse network entities from issuing audit certificates to any listed company in India with respect to the multi-crore scam at the IT major. The institute has cancelled the membership of six chartered accountants with respect to the accounting fraud at Satyam Computer Services. Emphasising that it had concluded the disciplinary enquiry at the earliest amongst domestic and international bodies, the ICAI said the present punishment awarded by Sebi is “only a reiteration of the verdict” passed by its disciplinary panel. However, the Institute of Chartered Accountants of India (ICAI), in an e-mailed statement, told PTI that it has no powers to take disciplinary action against chartered accountant firms and that a request was sent to the government in this regard in 2010. Sebi has also directed the audit major and its two erstwhile partners who worked on the IT firm’s accounts to disgorge wrongful gains worth over Rs 13 crore.
As per Sebi’s 108-page order, the two erstwhile members have also been restrained from issuing any certificate of audit of listed companies, among others, for three years. “With regards to Sebi order in the Satyam case, we would like to inform that the ICAI was the first to be off the blocks when the Satyam matter broke out in January 2009,” the institute said. The ICAI had awarded the maximum penalty of removal from membership permanently and imposition of monetary penalty on members involved in the matter, the statement said, adding that it would not like to specifically comment on the order passed by Sebi. “The present punishment awarded by Sebi is only a reiteration of the verdict passed by the disciplinary committee of ICAI except that while the ICAI had punished the concerned members, however the Sebi has imposed this punishment on the audit firm concerned,” the statement noted.
In 2010, the institute had sent its recommendation to the corporate affairs ministry for making amendments in the Chartered Accountants Act, 1949 to enable taking disciplinary action against CA firms. Further, the statement said the institute concluded its disciplinary enquiry at the earliest amongst “domestic/international agencies/ bodies within 3 years by the year 2012 and disposed of the matter by award of punishment by the year 2013”.