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PWC audit of 'India's Enron' faces probe

Source: The Guardian

Jul 04, 2009

Summary

Accountancy giant PricewaterhouseCoopers is facing deepening scrutiny over its audit of Satyam - the IT giant known as "India's Enron" - whose founder admitted fabricating cash and other non-existent assets of more than £1bn.

The audit of Satyam was not, as previously thought, carried out by PWC's main operation in India but by a small subsidiary called Lovelock & Lewes, according to the Central Bureau of Investigation, which looks into serious and complex Indian fraud cases.

The subsidiary was part of the old Coopers & Lybrand network swallowed up by PWC. Its role may have contributed to confusion over whether PWC was responsible for signing off the accounts.

The accountant's London office said it deployed Lovelock & Lewes because, under a quirk of Indian law, audit firms cannot employ more than 20 people and are not allowed to use their international brand name for audits.

PWC argues that its Indian arm is a separate legal entity from the global operation. Therefore, it says, the main firm would not be liable for any damages linked to the Satyam collapse. Ne

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