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April 28, 2009

Price Waterhouse auditors charged

Two Price Waterhouse (PW) auditors were among nine people officially charged by the Indian Central Bureau of Investigation (CBI) in connection with the Satyam accounting scandal.

Charges include criminal conspiracy, cheating by impersonation, forgery of valuable security, falsification of accounts and causing disappearance of evidence.

The scandal unfolded in January when financial irregularities totalling more than $1 billion were discovered at Satyam Computer Services.

PW auditors S Gopalakrishnan and Srinivas Talluri were arrested later that month on charges of criminal conspiracy and collusion in connection with fraud investigations into the Indian software company.

PW, the Indian audit arm of global accounting network PricewaterhouseCoopers, was Satyam’s external auditor.

The charges come despite former Satyam chief financial officer Vadlamani Srinivas claiming the auditors had no role in the scandal because they were given forged documents by the company’s management.

Srinivas made the comments while being interrogated about the fraud by the accountancy profession’s regulatory body, the Institute of Chartered Accountants of India (ICAI), the Economic Times in India reported.

Srinivas said former Satyam chairman Ramalinga Raju committed the fraud, with participation from his brother Rama Raju, cost accountant G Ramakrishna and Srinivas himself.

Institute of Cost and Works Accountants of India president Kunal Banerjee said the cost accountant involved is not a member of the institute.

“I do not know if he is a qualified cost accountant, because even after qualifying some do not always take membership,” Banerjee told The Accountant.

Banerjee said the fraud at Satyam was an aberration and not the result of the failure of any particular profession.

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