In a damage control move, Price Waterhouse, the external auditor of Hyderabad-based Satyam Computer Services, has set up a new advisory board and appointed a new quality assurance and risk management head.
Price Waterhouse (PW), a part of PricewaterhouseCoopers (PwC) — one of the big four audit firms — has been in the eye of a storm since January 7 when B Ramalinga Raju, founder of the Hyderabad-based Satyam, confessed to manipulating the company’s accounts in excess of Rs 7,000 crore.
On January 24, two partners of Price Waterhouse, S Gopalakrishnan and Srinivas Talluri, were arrested by the Andhra Pradesh police for colluding with Raju. PW suspended the two Satyam audit partners from all duties in January.
“The problems at Satyam have created a difficult environment and therefore we are taking all necessary steps to demonstrate to our clients and other stakeholders our commitment to highest standards”, said Ramesh Rajan, chairman of Price Waterhouse India.
PW would set up a five-member advisory board to provide guidance to the PW leadership. The five members of the board would be from outside the PwC network and would be eminent people in India. The fifth member would be from another country’s PwC firm.
The firm is also undertaking a thorough review of its work and processes. To oversee this work, PW would appoint a new head of quality assurance and risk management who would be selected from another firm in the PwC network.
Alongside, PW has appointed a new leader of its national assurance practice, Sharmila Karve, an experienced audit partner. Its Hyderabad office is also being placed under new management.
