Thursday, February 16, 2012

ICAI action too little, too late.

When business ethics are dwindling, the Institute of Chartered Accountants of India (ICAI) has tried to send a message to all  practicing CAs in India to continue their profession ethically and in order with the relevant laws of India. The Institute on Monday banned Srinivas Talluri, ex-CFO of erstwhile Satyam Computer Services, and former Pricewaterhouse auditor Vadlamani Srinivas from practice for life.

The audit regulator also imposed a penalty of Rs.5 lakh each on the two executives for their role in the Rs.14,000-crore fraud at the IT firm, which was exposed in 2009. The action is too little and too late for their role in the largest financial scam of Indian Corporate world known so far. ICAI disciplinary panel had found this duo culprit way back in June 2009. It has taken more than 30 months to announce the penalty.

Action against the audit managers Chintapatla Ravindranath and P Siva Prasad - who worked for Lovelock & Lewes then (an affiliate of PwC India network) were imposed in December last year. They were associated from 2001 till 2008, the glorious period of Satyam.

Jaydeep Shah, the new president of ICAI, assuring to penalize all those who were involved in the scam,said, "We will now act against Gopalakrishnan and V S Prabhakara Gupta (ex-internal audit head of Satyam), who have also been found guilty."

A spokesperson for PW India has snubbed this imposition by saying, "The DC proceedings are in context of individuals concerned and therefore as a firm PW India will not like to comment.”

Though late, but ICAI deserves credit for setting a new benchmark for regulatory diligence. It is observed that such statutory bodies normally try to shield their errant members. But the need to reform judiciary process to bring in the ethics in business is still there.

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