Quick prima facie case against the Rajus must: AuditorsJanuary 10th, 2009 - 6:25 pm ICT by IANS
Chennai, Jan 10 (IANS) If justice has to prevail, the government should establish a prima facie case against Satyam Computer’s former chairman B. Ramalinga Raju and his brother B. Rama Raju, who is also the company’s former managing director, say auditors here. “There is a confession by Ramalinga Raju saying that the cash that was supposed to be there is not there. It would have been a matter of time for Reserve Bank of India (RBI) to get the bank balance details of Satyam Computer Services or its associates to ascertain the existence, non-existence or withdrawal of the cash,” S. Santhanakrishnan, central council member of Institute of Chartered Accountants of India, told IANS.
According to him, a preliminary enquiry report could have been prepared in three days after questioning bankers.
“As a matter of fact, a prima facie case could be established within 72 hours of the confession,” he said from Dubai.
Another auditor, preferring anonymity, said no auditor will certify the bank balance - fixed, savings or current account - without seeing the fixed deposit receipt or the passbook.
“It should be probed whether banks acted as a party to the financial fraud confessed by the former Satyam Computer chairman.”
V. Murali, another member of ICAI’s central council, said the institute’s Financial Reporting Review Board has issued a notice to PriceWaterhouse Coopers (PWC), the statutory auditors for Satyam Computer Services.
“We have also called for the working papers. The reply is awaited. It is a basic lesson in auditing that a company should convert large cash balances into fixed deposits at the year-end. It is crucial to see the books as to what happened in Satyam Computer Services after March 31, 2008,” Murali said.
The working papers on how the bank reconciliation statement was prepared is expected to throw more light on the whole episode.
Murali said the investigating agencies should also question officials of Satyam’s accounting department.
Added Santhanakrishnan: “The government or SEBI (Securities and Exchange Board of India) should now stipulate that listed companies be subjected to joint audit and there should also be rotation of auditors.
“The rotation will ensure independence of the auditors. If both joint audit and auditor rotation are there, no audit firm will dance to the tunes of the company management to dress or cook up the accounts,” he added.
The auditor also said the Indian banking system could witness similar financial scandals in the days to come with the government scrapping the bank audit panel system and permitting the chairman of a bank to appoint the internal auditor.
“The government’s move is retrograde and will expose the financial sector to graver risk as witnessed in the Satyam Computer Services episode. The Indian banking system has not experienced any major financial scandal mainly because of audit by the Comptroller and Auditor General (CAG), and also because of the internal auditors appointed from the panel,” he said.
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- Satyam's Ramalinga Raju, two others get bail - Nov 04, 2011
- Satyam to pay $10mn to US regulator to settle fraud charges - Apr 06, 2011
- Apex court rejects Raju's plea on surrender - Nov 09, 2010
- Satyam, PWC units to pay penalties for accounting frauds - Apr 06, 2011
- Notice to Satyam ex-chief on CBI's plea to scrap bail (Lead) - Oct 01, 2010
- Court approves action against two auditors for Satyam lapses - May 31, 2011
- Apex court says no to Raju's plea on surrender (Lead) - Nov 09, 2010
- Supreme Court cancels bail of Raju, five others (Second Lead) - Oct 26, 2010
- Satyam case: no bail for Raju, seven others - Aug 30, 2011
- Satyam case: Supreme Court grants bail to five - Oct 13, 2011
- Ramalinga Raju discharged from hospital - Oct 02, 2010
- Former Satyam chief Raju gets bail (Second Lead) - Aug 18, 2010
- IT department freezes accounts of Mahindra Satyam (Lead) - Mar 22, 2011
- Satyam case to be heard on daily basis from Nov 8 - Nov 02, 2010
Tags: b rama raju, b ramalinga raju, bank reconciliation statement, chartered accountants of india, deposit receipt, institute of chartered accountants, institute of chartered accountants of india, pricewaterhouse coopers, reserve bank of india, satyam computer services