In line with the general apprehension in India that a fraud of the magnitude of Satyam could not have taken place without the active connivance of auditors has proved right when the Serious Fraud Investigation Office (SFIO) has clearly held Price Water House Coopers (PW) guilty of the falsification of accounts of Satyam while giving clean chit to the independent directors.
The SFIO also did not find any clean evidence against the then whole time director and senior executive R.Mynampati. While handing over its more than 14000 pages report on the Satyam scam after three months of investigation, the SIFO categorically reported that the two Satyam auditors viz, S.Gopalakrishnan and T.Srinivas were involved in the fraud by feigning ignorance about their ability to question the management over the authenticity of the documents provided to them.
According to SFIO, the auditor’s are supposed not to follow any thing and everything said by management but instead should have got confirmation from banks and others. The report further said that the auditors have even knew of the audit failures through a report generated by in house system department of Satyam in 2007.
The two auditors appointed by PW, Gopalakrishnan and Talluri are already in a Hyderabad jail and are being grilled by various investigating agencies including CBI.
Meanwhile PW has reacted by saying that the two Satyam audit partners (i.e. Gopalakrishnan and Talluri) and PW India were victims of the fraud (rather than involved in the scam).