India regulators have banned PricewaterhouseCoopers (PwC) from auditing in the nation for the next two years, according to news from The Financial Times this week.
According to the publication, the Securities and Exchange Board of India (SEBI) issued the ban after PwC reportedly failed to catch an accounting fraud scheme at Satyam Computer Services, a high-profile scandal in which the firm admitted to manipulating its books by $1.7 billion.
India regulators said in its report that PwC did not identify “glaring anomalies” in Satyam’s financial reports. The fraud occurred for about five years starting in 2003, reports said, and involved thousands of fake invoices. The scheme was left unchecked, the SEBI said, in part because PwC “did not independently check the veracity of the monthly bank statements.”
Regulators slammed PwC for trusting Satyam “without any further examination or inquiry into the matter and ignored the balance confirmations received directly from banks which were showing true balances.”
In addition to the two-year ban, PwC was ordered to pay about $2 million.
PwC said it was “disappointed” by the SEBI’s findings and stressed it does not agree with the conclusions.
“There has been no intentional wrongdoing by [PwC] firms in the unprecedented management perpetrated fraud at Satyam,” PwC said in a statement. It added that it has enhanced its processes since the Satyam scandal broke.
Last year, PwC was hit with a record $6.5 million fine by U.K. regulators over the alleged mishandling of Connaught auditing. Last May, the Financial Reporting Council (FRC) issued the fine against the auditor and its partner Stephen Harrison; an FRC probe concluded PwC engaged in misconduct linked to “mobilization costs, long term contracts and intangible assets.”
Soon thereafter, PwC issued an apology, adding that since 2010, when Connaught went into administration, it has improved its processes.
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