Letter to the President

Dear Mr.President,

I write this letter with a very very heavy heart. Satyam fraud has resulted in a crisis of confidence. The investor community has lost confidence in auditors. For the first time in the history of corporate India, two chartered accountants have been arrested and kept in judicial custody. There are rumours that the two have confessed that they have colluded with the management in committing the fraud.To add fuel to the fire, an article in Business Standard read that certificates issued by Chartered accountants for payments under Section 195 of the Income tax act have come under the scanner as some CAs are certifying left right and centre without looking into the applicability of TDS, for the want of money. (This allegations are made by IT department officials as if they are all Raja Harishchandras!!!)

The above happenings warrant the following:

1) Instilling the public confidence in the CA fraternity by taking swift disciplinary action against the guilty (Satyam and IT certification)

2) Make the general public understand that auditors dont enter their client's premises sniffing fraud and the expectation gap also needs to be bridged

With due respect to the institute and yourself, I believe you have, rather unfortunately, got your priorities wrong. Instead of weathering the storm, you have also started playing the blame game. If couple of partners in PwC colluded with the management in committing the fraud (not yet proved) how can you initiate action against the firm as a whole? Please remember that, the guilty are the profession's enemies and not PwC. This attitude is omnipresent among all non big 4 partners and employees. Aren't people working in PwC members of ICAI? If PwC goes the Arthur Anderson way for the deeds of 2 partners, what would happen to the thousands of people working there? And what was the reason in reacting angrily to appointment of KPMG and Deloitte as auditors of Satyam? Sir it is well understood that KPMG and Deloitte in India mean the Indian firms under their umbrellas. It must be understood that while every other profession/sector is opening up, we cannot remain shut. Whether you accept it or not the "hated in India" Big4 firms have certainly brought in quality into the audit work, in India. This view is also seconded by our ex finance and current home minister.

So please wage battles to weed out fraudulent auditors and not Big 4 firms.

Thanks and Regards

CA.M.Mukund

(Articleship - PwC)

P.S - Since I have been a PwC article I know about the quality of audit work carried out there. As I am also a member of the institute I am also competent enough to comment on the audit quality.