Satyam Computer Services Ltd and auditor PricewaterhouseCoopers have agreed to pay a combined $17.5 million to settle probe into an accounting fraud that became India's biggest corporate scandal in 2009.
The US Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) orders found that PW India’s audits of Satyam did not meet US professional standards and, as a result, did not discover the fraud underlying Satyam's 2005-2008 financial statements. The orders make clear that Satyam management engaged in a years-long fraud, going so far as to create scores of fictitious documents for the purpose of misleading the auditors.
These settlements, in which PW India neither admits nor denies the US regulators’ findings, apply only to the US regulatory inquiries into Satyam. Neither of the orders found that PW India or any of its professionals engaged in any intentional wrongdoing or was otherwise involved in the fraud perpetrated by the Satyam management.
The settlements mark the end of the Satyam-related US regulatory inquiries concerning PW India. As part of the settlements, PW India has consented, among other things, to: undertakings designed to enhance its audit quality and its overall quality management system through enhanced training, reviews, and engagement oversight; payments totalling $7.5 million; a six-month limitation on accepting certain new audit engagements for affiliates of SEC-registrants; a temporary limitation on accepting new SEC registered audit clients; and the appointment of an independent monitor to review and assess the firm’s progress against the undertakings.
