The Hindu : National : Auditors claimed Satyam’s accounts were ‘fairly stated’

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Auditors claimed Satyam’s accounts were ‘fairly stated’

S. Nagesh Kumar

HYDERABAD: Price Waterhouse, statutory auditors of the scam-tainted Satyam Computers, had stated on October 7, 2008 that the financial statements of the company for the quarter and half year ended September 2008, were “fairly stated.”

It was during this quarter that the major fudging of accounts took place, going by the confession made by disgraced Satyam chairman B. Ramalinga Raju, to his Board of Directors on January 7. He had admitted that the balance sheet showed non-existent cash and bank balances, non-existent interest, understated liability and over-stated debtors position besides fudged revenues and operating margins, all totalling to over Rs. 7,100 crore.

“We conduct our audit of the financial statements in accordance with the Auditing and Assurance Standards. Our audit is designed to obtain reasonable assurance that the financial statements are fairly stated,” Ch. Ravindranath, Engagement Manager representing the auditors, informed the Audit Committee meeting chaired by Prof. M. Rammohan Rao.

Price Waterhouse also said that it did not notice “significant risks and exposures” during its audit of the financial statements and, as represented by the management for the quarter and six months ended September 30, 2008, which had a potential effect on the financial statements.” There were no disagreements with the Satyam management and the latter’s judgments and accounting estimates were in line with the general accepted accounting principles, the auditors said.

During the discussions on the financial statements, Chief Financial Officer Vadlamani Srinivas said Satyam gained Rs. 8 crore in foreign exchange during the quarter when most of its peers ended the period with forex loss.

Vinod Dham, a director, enquired about the World Bank matter and its misreporting. The then whole-time director Ram Mynampati informed that the company had won many accolades from the World Bank and the latter had denied the rumours within two hours of misreporting. (Satyam was barred by the World Bank for doing any business with it directly for giving ‘improper financial benefits’ to its staff).

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