Satyam to fire auditors?

The Board of Satayam is understood to be taking steps to remove the Company’s auditor, PriceWaterhouseCoopers, following the failure by the audit firm to detect the €1.5bn fraud. The Company has not however confirmed the move, although The Times of India reported that the President of the Institute of Chartered Accountants of India, Uttam Prakash Aggarwal, had confirmed that Satyam management was considering a new auditor for the Company.

Under s224(7) of India’s Companies Act, the auditors, having being re-appointed at the Company’s AGM in August, can only be removed with the approval of shareholders in general meeting and with the approval of the Indian Government.

Satyam’s accounts are currently undergoing restatement, a process expected to take 3-4 months, with this task being undertaken by KPMG and Deloitte. Sources close to the Company were quoted in the newspaper report as saying, “In this case, Price Waterhouse continues to be the statutory auditor while also being under suspicion for complicity or negligence to the scam. Therefore, it would be awkward to engage the tainted auditor for certifying the restated accounts”.