Economic Fraud
ICAI Suspends PwC Auditor For One Year For Professional Misconduct
NEW DELHI: A former Pricewaterhouse Coopers Pvt. Ltd auditor was barred from the Institute of Chartered Accountants of India (ICAI) register for a year by the disciplinary committee.
The first charge levelled against the Chartered Accountant was that during the course of the inspection, the Chartered Accountant discovered that M/s Pricewaterhouse Coopers Pvt. Ltd. had received grant (support) amounts of US $ 39,30,000/- (INR 17,42,95,5000) and US $ 1,80,00,000/- (MR 79,88,60,0000) in the Financial Years 31st March 2011 and 31st March 2012, which were shown in the Financial Years 31st March 2010 and 31st March 2011 on the accrual basis.
However, the Company had not indicated or represented in the Profit & Loss Account how the grant money had been generated and/or spent as per the agreement, and hence the Profit & Loss Account and Balance Sheet could not be characterised as truthful and fair.
Second, during the Financial Year 31st March 2009 to 31st March 2011, the disclosure required for related party transactions with M/s Pricewaterhouse Coopers Services Delivery Centre (Kolkata) Private Limited for providing services worth Rs.120,32,56,658/- from 1.7.2010 to 31.3.2012 and receiving services worth Rs.1,50,33,7651- from 1.4.2011 to 31.3.2012 was not made.
Thus, it was asserted that the Respondent failed to qualify’ its audit report for non-compliance with Accounting Standard-18, resulting in a breach of Section 227(3)(d) of the Act relating to Section 211(3A).
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Based on the facts, the committee concluded that there was a discrepancy between the actual amount of services received/rendered and that reported in the financial statements and that the disclosure regarding related party transactions was not provided, implying that the Respondent had failed to exercise due diligence and was grossly negligent in the performance of his professional duties.
Furthermore, he failed to gather sufficient information for providing an opinion on the Company’s Financial Statements, and he also failed to draw notice to the major deviation from the widely accepted audit practice.
The Disciplinary Committee held, based on its findings, that “keeping in view the facts and circumstances of the case, material on record, and representations of the Respondent made before it, the Committee is of the opinion that professional misconduct on the part of the Respondent is established, and ends of justice can be met if reasonable punishment is given to him.” As a result, the Committee decided that the Respondent’s name, CA. Jayanta Bhattacharya (M.No.017916), be removed from the Register of Members for one year (one year).”
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