If you are not happy with the results below please do another search
It was a quiet almost-end to a sordid chapter in PwC’s history. Last week I wrote about PwC’s settlement of their Satyam class action lawsuits in New York for Forbes. Here’s some additional commentary and analysis, including links to all the stories I’ve written about the scandal since it broke in January 2009.
It’s the potential for sudden conflagrations in developing countries that keeps the global audit firms – PwC in this case – up at night. The legal quagmires in developed countries are messy, too. PwC may want to put the Satyam scandal behind them but, unfortunately, I fear there’s still much more pain for the firm to come.
In December of 2009, India’s Central Bureau of Investigation (CBI) arrested Mahindra Satyam’s internal audit head V S Prabhakar Gupta for his alleged involvement in the Satyam fraud.
Taking care of family and close friends first is universal. Whether Irish, Italian, Kenyan, Mexican, or Tunisian… Legal, regulatory, ethical and moral lines are often crossed in service to family and those who are “like a brother to me…” There are obvious similarities between the Satyam and Glitnir frauds, not the least of which is they share an auditor – PwC.
US and Indian regulators and investigators are focusing on the wrong thing when investigating the Satyam scandal. It’s not the audit failure that’s most important.
Follow the money.
Emails were sent or phone calls made yesterday to the following Satyam clients. The request was this: I would like to talk to you about [X Organization’s] relationship with Satyam, the IT outsourcing firm in India. I am interested in how this relationship started, how you came to know about Satyam, and how Satyam was […]
Sounds like, in addition to the recent comments reporting PwC reductions once the new fiscal year started, it’s now time for PwC partners to realize my half tongue-in-cheek prediction of partner layoffs and salary reductions.
In the meantime there have been several updates and new developments from India. The consensus of those “in the know” is:
“PwC messed up big time.”
It’s been a very hot few weeks here in Chicago. After last weekend’s thunderstorms, we’ve had temperatures between 85-90 or so all week. (That’s 30-32 C for you metric folks.)
Needless to say, Rosie Rott and I have been drinking a lot of liquids. I feel like a broken record telling everyone at an event last night, “It’s about time we had hot weather. Wasn’t that a lousy winter we had, worst ever? I blew five tires from potholes. Oh, how I wished I was in Mexico. Better sunshine than snow. I just turned off my heat on Memorial Day weekend…”
Such is the nature of chit-chat.
It’s been a busy week for me, in spite of the fact some of you may complain about the lack of a new blockbuster post.
Independence is one of the most important concepts a public accountant must grapple with. Before the technical standards, before the decisions about classification of transactions, before the methodologies, checklists, and workpapers, before any mechanical pencils are pumped with lead, one must decide whether to accept the client, and every subsequent engagement for that client, based on the codified standards for independence and objectivity, as well as one’s appetite for risk…To reenter the systems integration business, PwC had to find a way around their own weakness in technology leadership, lack of experienced resources, and the constraints of the IBM non-compete agreement.
Enter Satyam.
It was only a couple of days ago that Price Waterhouse India was plotting their defense to this “everything old is new again” fine mess they’ve gotten themselves into.
Apologies to William Shakespeare and to one of his most beloved speeches from Romeo and Juliet:
Tis but thy name that is the enemy of PricewaterhouseCoopers;
Pricewaterhouse & Co India
Thou art thyself, though not really PriceWaterhouseCoopers.
What’s PricewaterhouseCoopers?
It is neither here, nor there,
Neither men, nor solid rock, nor any other part
Belonging to a true firm.
I chose the summary of the scandal from Hindustan Times for a reason. It was the only one that did not mention PricewaterhouseCoopers, Satyam’s long-term auditors. Every other report does..