Firms Are Making Big Expansions in India
Thanks to Reuters we’ve got some solid intel on accounting firms’ increasing their presence — and therefore headcounts — in India, expanding out from city centers and into smaller cities and towns. We’ve known for some time that offshoring has exploded in recent years, now we know there’s much more room to grow. 1,269,219 square […]
Deloitte Plans to Have a Third of Its Workforce Operating From India Within the Next Four Years, Says South Asia CEO
That’s it. That’s the story. Published today in India’s business paper The Economic Times: Deloitte plans to have around 30% of its workforce operating from India within the next four years, with an estimated total employee count ranging from 150,000 to 160,000, as the country figures prominently in the firm’s global growth plans, according to […]
BDO RISE Senior Associate Responded to Being Counseled Out With a Bomb Threat
Indian media is reporting 25-year-old Prasad Navaneeth, formerly a senior associate at BDO USA’s growing India office BDO RISE, was detained for making a hoax bomb threat targeting his office at the RMZ Ecospace tech park in Bellandur. Several articles state that he’d been told to resign due to poor performance and that he refutes […]
Rise Up! BDO USA Is Gonna Double Its Offshore Workforce, Mostly in India
[Ed. note: scroll down for assy commentary and screenshots of BDO leadership’s visit to India just days after they laid off a bunch of people in advisory, I need to get this part out of the way first] Financial Times has written about BDO USA’s plan to double its offshore workforce and couched the move […]
Grant Thornton Scores Coveted ‘Hot Garbage’ Audit (UPDATE)
Ed. note: Adani Group has said that a Grant Thornton audit is simply a “market rumor.” Video update at the bottom. Earlier this month, short seller Hindenburg Research dropped a report called Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History (report here) full of bullet points outlining […]
If You Let 23-Year-Olds Sign Off on Audits, You’re Gonna Have a Bad Time
On January 24, short seller Hindenburg Research dropped a report called Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History, in which Hindenburg accuses Indian conglomerate Adani Group of engaging in “a brazen stock manipulation and accounting fraud scheme over the course of decades,” among other things. A […]
Moss Adams is Going on a Hiring Spree in India
The Hindu Businessline is reporting that Moss Adams plans to hire a few hundred people in India over the next couple years because India “offers the best talent pool.” Talent shortage? Aggressive growth? Cheaper labor? Who can say. But Moss Adams’ COO Dave Follett gave all the details to Businessline. Read: American accounting and consultancy […]
Are Accounting Firms Really Sending 30% of Their Work Offshore?
In the past several weeks we have heard — and read — about huge amounts of work getting sent offshore. To India mostly, also the Philippines. Outsourcing is nothing new and rather expected given today’s talent shortages but 30%? Perhaps more? Doing a quick search pulled up a 2011 Accountancy Age article which mentioned PwC […]
Let’s Play a Game of ‘Which Big 4 Firm(s) In India Does This Bad Look Belong To?’
A tipster sent us this blurb that was published in the Suits & Sayings section of the Economic Times last weekend: When I first saw this, my first thought was that the Big 4 firm where the partner was supposedly sexually harassing women co-workers is EY in India, given its history of it allegedly happening […]
The CPA Exam Overlords Are Extending Continuous Testing to Candidates In India
It’s been a strange year indeed. As such, NASBA has spent most of 2020 deftly navigating a totally unexpected pandemic while at the same time knowing that even if this year had been smooth sailing, a constriction in the pipeline of future CPAs has made their work more important than ever. It may feel like […]
Let’s See How the Big 4 Firms In India Are Faring During the COVID-19 Pandemic
[Updated with additional information.] This GIF from Mad Men pretty much says it all, but things could be worse. To our knowledge, there haven’t been any pandemic-related layoffs … yet … at any of the Big 4 firms in India. I kinda buried this in the article we posted last week on accountants’ layoff predictions […]
Oh Look, EY Is On the Receiving End Of Another Sexual Harassment Complaint
After we recently reported on sexual harassment allegations made against male executives at EY U.S. and EY Switzerland by former female employees, Adrienne and I got an email from a woman by the name of Ana Raquel Villanueva who told us that she, too, was a victim of sexual harassment while employed at EY in […]
Driver Admits to Dozing Off In Crash That Killed PwC Senior Associate In India
The man who was driving three PwC employees to work in India on Jan. 9 told police he fell asleep right before the office pool car climbed a median divider and smashed into a lamp post, killing one of his passengers and injuring the other two. According to The Times of India, police have booked […]
PwC Senior Associate In India Killed, Two Colleagues Injured In Rollover Car Crash
Sad news to report out of India, as three PwC employees were injured, one fatally, in a rollover car accident Wednesday morning. The three men were passengers in an office pool car and were on their way to work at PwC’s office in Kolkata, West Bengal, when the vehicle suddenly swerved to the right and […]
Satyam Founder Sentenced to 6 Months in Prison for Massive, Obvious Fraud
Remember Satyam? That Satyam? Yeah, it's been awhile for us, too. Satyam's PwC India auditors already received a lifetime ban, but what about Satyam's founder? Surely you've been wondering what sort of slap on the wrist he'd get for one of the largest and most blatant frauds in history? Wonder no longer: A local court […]
Citizens of India Can Sit For the CPA Exam in the Middle East Starting October 1
It's certainly the next best thing to being able to sit for the exam in India: The American Institute of CPAs (AICPA), the National Association of State Boards of Accountancy (NASBA) and Prometric today announced that testing for the Uniform CPA Examination in the Middle East will be open to all qualified citizens and permanent […]
Ex-Employee Chronicles Grant Thornton’s Gutting of CCR After Acquisition
A few Accounting News Roundups ago, Colin linked to a story about Grant Thornton's new tax hub in Bangalore. In that article, GT CEO Stephen Chipman enthusiastically declared his own tax return is prepared by Indians in Bangalore, which is fine for him. What Colin didn't highlight was this quote, in which Chipman declares hiring […]
The Tax Man Drumeth
With the sound of the drums echoing off the walls of the surrounding buildings, it feels as if it could be an impromptu street performance – but it's not. This is tax collecting Bangalore-style. Fed up with companies refusing to pay their tax bills, the city has gone one better than merely sending out reminder letters. Instead it […]
Any Tax Professionals at Grant Thornton Interested in Going to India?
Because of recent events, you may have thought that not much was in the works at Grant Thornton. Well, you'd be wrong. Stephen Chipman runs a tight fish and chip house so while you've all been distracted by pests, tattoos, and buttering up the POTUS, SC and his team have been planning your next dynamic […]
Now That They’ve Put the Biggest Fraud in India’s History Behind Them, PwC Thinks an Independent Audit Regulator Might Be a Good Idea
PwC India Chairman Deepak Kapoor is in Davos and must be engaging in some real brain busters. I mean, what savvy political mind could have passed along this little suggestion? "[W]e need to move with the times. A number of large countries such as the US and even some smaller ones like Sri Lanka have […]
PwC Is the Real Victim in This Whole Satyam Suing the Crap Out of Everyone Situation, Says PwC
The Indian Enron fuckshow otherwise known as Satyam has seemingly been in our lives since before Adrienne had tattoos. Even after settlements, new auditors, and delayed restatement after delayed restatement, one might think that we had heard the last of this godforsaken money pit. Nope! Indian software outsourcer Mahindra Satyam on Monday said it had filed […]
What If 20 Percent of Audit Work Was Performed Offshore?
You may have heard that accounting firms – primarily Big 4 firms – have been slowly transitioning work to countries like India and Sri Lanka. This particular topic of discussion typically results in a heated/subtly racist conversations about “foreigners taking American jobs” which eventually evolves into a more overtly racist conversation, not unlike what happens on some Deloitte forums.
ANYWAY, just how much work is being sent offshore? The FT reported some recent projections that the UK’s Financial Reporting Council (“FRC”) found for PwC in the UK:
In an annual inspection report, the FRC said the UK arm of PwC might move as much as 20 per cent of its core audit work to Calcutta by 2014. Less than 2 per cent of its work was offshored in its last financial year.
“On the face of it, 20 per cent of an audit being done without any face-to-face contact with the client seems high,” [FRC Director of Audit Paul] George said. He added that all the large UK audit firms were considering offshoring to cut costs but had so far only shifted a tiny fraction of work overseas.
That “20 percent” has a few people concerned and the FRC is looking into it. Granted, this is just an isolated example to audits at PwC, so obviously your offwhoring experience would vary from audit to audit and also for tax and advisory services. And lest you think this is all about money, the article quotes a flak from P. Dubs as saying, “The driver for us was not a reduction in costs. It is an improvement in quality.” O RLY?
Since many of you have worked directly with this process, you may have a difference opinion with this statement and one tipster – who is interested in hearing other people’s offshoring tales – details his:
My experience with this process has been horrendous. Don’t let comments in the article fool you, we are required to send a set amount of hours overseas to be performed by our shared service center. A process that would originally take 1 hour to start and complete (think bank reconciliations) now takes 6 hours. Nothing like writing instructions on how to perform a simple process and receiving a phone call from someone who barely speaks English to ask you how to perform the test. Or receiving a bunch of garbage and re-doing the work yourself.
Teaching someone how to do something, who has presumably never done it before, is difficult. Teaching someone how to do something, who has presumably never done it before, over the phone is worse. Teaching someone how to do something, who has presumably never done it before, over the phone, whose first language is something other than English is maddening.
Arguably, offshoring has benefits but if this trading 1 hour for 6 hours is fairly standard, then quality certainly isn’t one of them. Of course for a firm flak to say otherwise is grounds for a severe beating from his/her superior. The mere idea of trading 1 hour of work for 6 hours is enough to make a manager lose their shit unless the 6 hours are significantly cheaper. Then there’s the whole “client service” thing which is tricky from the get-go. How do you best explain the increased hours and/or the fact that you’re waiting on something from “the offshore team” that’s ordinarily slapped together in a few minutes?
Clearly, this “20 percent” is a shot in the dark but it’s definitely enough to make someone say, “OH HELL NO. NOT ON MY ENGAGEMENT.” But it’s not impossible that some of you have a grand time with the offshoring, so either way, you should let us know.
India Is Still Balking at This Whole Convergence to IFRS Thing
In May, IASB member Prabhakar Kalavacherla threatened India by telling a conference in Mumbai “to put it in one sentence, we strongly encourage adoption as against convergence,” suggesting that India could totally contribute to the rule-setting if it will just go ahead and adopt IFRS now. That sort of attitude is hilarious and why watching the IFRS “condorsement” plan getting burped up around the world is so much fun. Really? Adopt first, ask questions later?
India isn’t buying it, although looking to the U.S. and Japan for answers isn’t going to help matters either.
The Economic Times has the story:
The government is planning to introduce additional changes to global accounting standard, IFRS, to make it more palatable for Indian companies, overriding the international opposition to amendments already made. Such a move will extend the eventual migration by Indian companies to the global standard and also insulate local firms from any short-term capital market shocks that may arise due to erosion in valuations.
However, any changes to the Indian version of the International Financial Reporting Standards (IFRS) will take time as the government will initially look at some of the revisions being suggested globally, specially by the developed markets of US and Japan, before finalising the road map, secretary, ministry of corporate affairs D K Mittal told ET on Thursday. “We have to see how IFRS will meet our requirements. Our markets are different, our standards are different,” he said.
Quote of the convergence! “Our markets are different, our standards are different.” I’m sorry, maybe I’m confused on how this convergence thing is supposed to work (entirely possible as I’m not an accountant and therefore not required to understand what’s happening here) but couldn’t each country getting IFRS shoved down its throat say the same? That’s why global economies are (read: were) such a beautiful thing; different markets breed different standards, and market participants have the option to say whether or not they find a particular country’s financial standards appealing. With forced adoption of a single arbitrary standard, determined by an entity with questionable self-interest at work, you take away investors’ ability to put their money where their mouth is.
GAAP has obviously failed. The evaporation of capital in the United States over the last 3 years proves it. But the whole Adopt-or-Else plan isn’t necessarily any better either.
In my humble opinion, it just makes the IASB look desperate and India look awesome. For now.
IASB Would Prefer If India Were to Play Ball, Adopt IFRS
The International Accounting Standards Board is none-too-pleased that India has retreated from plans to fully adopt International Financial Reporting Standards this year and is a making a public push to get the country back on track. A failure to persuade India on the issue would raise serious questions about how successful IASB can be in convincing other major economies, including the U.S., China and Japan, to make a full switch. “To put it in one sentence, we strongly encourage adoption as against convergence,” IASB member Prabhakar Kalavacherla said at a conference in Mumbai last week, according to a copy of his speech, where he urged India to take a bigger role in international standard setting to address its concerns. [CFO Journal]
No Serious Allegations in India Makes for a Good Year in the Accounting Profession
You know it was a good year when no one got sued, at least according to Asish Bhattacharyya, Professor of Finance and Control at Indian Institute of Management – Calcutta. Here are his thoughts via Business Standard:
Although there was spill over, the year 2010 for the accounting profession was overall a very good year. The Institute of Chartered Accountants of India (ICAI) could complete its task of formulating new set of accounting standards, which are fully convergent with IFRS. There was no serious allegation against the Chartered Accountancy profession. Job opportunities for young chartered accountants were plenty. The Institute of Cost and Works Accountants (ICWAI) has also done a commendable job of issuing a significant number of cost accounting standards. It could improve its image in the public eye. We may hope that the year 2011 will be an excellent year for the accounting profession.
That may come off as a bit optimistic but if the power of suggestion won’t work, perhaps a threat will. We hope that the members of the accounting profession will take note of this expectation.
Transparency International places India low in terms of ‘corruption perception index’. The score of 9-10 represents very clean. India’s score for the year 2010 is 3.3. If, India is high in corruption, professionals, particularly the accounting profession, cannot escape the responsibility. The society expects that the accounting profession will make all out efforts to eliminate corruption and that it will not use its skills and knowledge to manage corruption.
Key request being “that the accounting profession will make all out efforts to eliminate corruption and that it will not use its skills and knowledge to manage corruption.” Be careful saying things like that out loud, the big firms might get some revenue source ideas that involve exotic commodotized services packaged as “consulting and advisory”.
I don’t think we can say the same of 2010 being a good year for accounting over here in the good old U S of A (some could argue US accounting has had a bad bad year) but it’s a good thing no one called us and asked us to do exactly that.
Jim Quigley Would Really Like It if the Big 4 Could Audit in India
Deloitte is hiring about 3,000 people in India as part of their hiring bonanza and global CEO Jim Quigley dug into his bag of boilerplate statements to express his excitement:
“India is an extremely important market for Deloitte. As…Opportunities in the new economic environment emerge in India, Deloitte with its focus on hiring, developing, and deploying the best talent in the region, will help clients capitalise on these new market initiatives,” Deloitte Global CEO Jim Quigley told reporters here.
Right. So nothing new there. However, Quigs thinks that it’d be really swell if TPTB in India would change their mind about letting the Big 4 provide audit services there:
Quigley also made a case for India to open up its market and allow global audit firms to practice here, besides providing consulting and advisory assistance.
Allowing international accounting firms to practice here would require India to negotiate and allow the service to be accessed under the World Trade Organisation (WTO). At present, India has not opened up services like audit and law for foreign practitioners.
“I urge the Indian authorities to give a serious thought to allowing global audit firms to practice here. It is for the betterment of accounting professionals. A mutual recognition is required out of foreign direct investment,” Quigley said.
See? It’s not just about the biggest firm in the known universe getting bigger, it’s for the betterment for the entire accounting race. There’s so much fun to be had. The Satyams of the world are once in a blue moon.
The Restatement That Never Ends: KPMG Hasn’t Received Necessary Docs for Satyam
Back in June we told you about Satyam requesting just a wee bit more time to nail down their restatement of their financial statements. It wasn’t because KPMG and Deloitte weren’t working their asses off, it was more of commitment to get things right. Putting good numbers out there, repairing broken trust, so on and so forth.
Well! The three month extension ends next month but as you might expect, there’s a bit of a problem. More specifically, KPMG is now saying that they haven’t received the documentation necessary to finish the job. Unless everyone is okay with some wild-ass guesses, in which case they can proceed.
[F]or all its documents, KPMG had to depend on the [Central Bureau of Investigation (“CBI”), which is investigating the scam.
NDTV has learnt that KPMG’s analysis of the documents don’t match with the CBI’s. There is a discrepancy between the two which amounts to over [$200 million].
CBI has based its calculations on estimates of Satyam’s assets and liabilities while KPMG says they need documentation to base their estimates.
KPMG says that they didn’t get all the documents needed to make a clear assessment which is why the accounts are likely to be re-stated full of riders.
But again, if you’re cool with some double-entry hocus-pocus, that can be arranged. There’s a merger at stake after all, “This confusion in the numbers could hold up Satyam’s merger with Tech Mahindra, which needs the go ahead from market regulators in India and the US, since Satyam is also listed in the US.”
Good luck getting that U.S. approval.
Satyam accounts restatement: KPMG’s analysis differs with CBI’s [NDTV]
Jim Quigley Takes Exception with the Notion That Deloitte Isn’t the Biggest Firm in India
You don’t need to tell Jim Quigley that it’s only a matter of time before Deloitte is the largest accounting firm ON EARTH.
In a Q&A with India’s Business Standard, Quigs was asked about the shrinking gap and you better believe the man is all over it like a hard-hitting interview at Davos:
After five years, we have eliminated the gap. They were once $2 billion larger than us.
At $26.1 billion for FY ’09, Deloitte is all over PwC ($26.2 billion in FY ’09) for the Biggest of the Big 4 in terms of revenue. However, JQ was a little more defensive when asked about the firm’s presence in India.
But if one looks at India, the perception is that you are the smallest amongst the Big Four.
I think we are the largest in India when you look at the number of people. We have 12,000 Deloitte people in India and we are on our way to 20,000 people.
In other words, “Thanks for bringing that up but since India revenue isn’t known, head count is how we’ll measure this. And in that particular case, we’re the largest. Next question.”
But a lot of them are your [Business Process Outsourcing] employees at Hyderabad.
Yes, we have about 8,000 people there. And we are growing that towards 15,000. They are focused on serving the global market place.We have the number one audit share in India. Our audit share of the listed companies is larger than any of the competitors. My goal is to go for balanced growth in India. I want to be one-third audit, one-third tax and one-third consulting. Growing the tax and consulting businesses is easier than it is to move the audit share because companies don’t change auditors often. The fact that we start with the largest audit share is a terrific foundation for us. My aspiration is that I want to be the absolute leader in professional services, especially in important emerging markets like India.
Translation: “Are BPO people not employees? Why wouldn’t we count them? And since we are counting them we’re going to double that number, FYI. Oh, and we have the biggest audit share in India and it we’ll eventually be biggest in everything so then they’re won’t be room for ‘debate’ (making the air quotes).”
In how many years?
In three to five years, I want to be the absolute leader here. I have more people here than anyone else today.
That is, “Deloitte numero uno by 2015! Did I mention that we have the most people here?”
Then the best part, comes a little later when Quigs gets the Satyam question:
How has Deloitte strengthened its internal controls after the Satyam scandal?
I don’t think you can say that if one firm has had an issue with Satyam, therefore all professional services firms have a problem.n the aftermath of that fraud, and it was a management fraud first, to make sure that we did not have comparable circumstances, we went back and reviewed our 50 largest audits. We challenged our partners and thinking. We were satisfied that we have completed procedures that will reduce to a relatively low level the risk that an undetected error could occur. Our commitment to quality is tireless. And that is what you want the market leader to be.
So it sounds as though Satyam will be NBD for Deloitte, unlike some firms. We know India is a fraud paradise so it wasn’t was their fault; they were duped. Deloitte is undupable.
‘Deloitte wants to be the absolute leader here’ [Business Standard]
Walking the Opportunistic Line – What Should the Big 4 Do About India?
The developing issues in India have been covered by Going Concern on a fairly regular basis, so I suppose I should take a crack at the subject as well.
It can be very easy scroll past the articles on India, but I advise you not to; after all, as one of the BRIC countries (do your homework), there is an absolute necessity for the Big 4 to position their resources here. And no, I’m not referring to outsourcing.
Based on February research, the Gold Men are bold to state the following:
While it’s clear that BRICs nations tightened their financial conditions when the financial crisis hit at the end of 2008, they rapidly eased back afterwards. Chinese and Indian financial conditions have eased substantially post-crisis, they’re now looser than pre-crisis even. Brazilian conditions also remain very stimulative compared to its past decade. Only Russia looks tight and unstimulative historically.
Sounds like a cash cow, doesn’t it? The BRIC development has long been looked at as the next fat cow for accounting firms to feed off of; closing the gap between the SOX hey days and the inevitable eventual IFRS transition. A fundamental issue is how the firms chase after business in these emerging markets. Push too hard and get burned. Tip toe through the daises and be passed by your three bullish cousins. Either way, on the table at all times is the branding image of each firm.
No one wants a Satyam situation on their hands, because even though no one knows what Satyam actually does, PwC’s global image is at stake because of this situation. Think about ripple effects. The potential client that is ignorant of the situation and whose thought process is “I think PwC is in some kind of trouble in India” is a more volatile problem than a client that, you know, reads the paper every day. Protecting the welfare of client relationships, but seeds and established, is absolute priority in situations like this.
With the exception of those few public sponsorships, the Big 4 don’t spend much time in the presses. And you know what? The big wigs like it that way. After all, we’re all accountants, forced to work in broom closets and wet basements for long hours and GREAT financial gain.
So the quieter the better, because we all know how it turned out for the last one to steal the spotlight.
KPMG Survey: India is a Hotbed for Fraud Due to Competition, Diminishing Ethical Values
In this morning’s Roundup, we told you about the ICAI belly-aching about the Big 4 circumventing the rules in India to the point of extreme annoyance but technically not breaking said rules.
Strangely enough, BusinessWeek has a story today that cites a KPMG report that found that fraud is on the rise in India due not to shifty international accounting cooperatives but rather to, among other things, the pressure of increased competition in the last two years.
As you might expect, fraud due to financial reporting is the biggest problem. The report cited, “weak rules and the inability of authorities to enforce regulation.” Other things mentioned as opportunities for chicanery:
• “Volatile economic conditions”
• “Increasing business and technological complexities”
So does that mean opportunities for fraud are ubiquitous? Do the respondents really believe that India is the only place where this is happening?
And the attitude/lack of self-control part of your triangle:
• “Diminishing ethical values”
• “Failure on part of managers to act against deviations from established policies and processes”
Diminishing ethical values? Deviating from established policies? Again, the respondents can’t think this is unique to India so shall we just assume that it’s more widespread there?
Some other contributing factors cited were “executives vying for higher pay, weak internal controls and increasing competition…for market share.” But wait! KPMG’s survey said that there were “’encouraging signs’ that mechanisms for detection of fraud through internal audits had improved.” That’s nice despite the fact that sounds similar to something that Overstock management said in their earnings call yesterday.
If you have “weak rules” accompanied by spineless bureaucrats that won’t even enforce those rules, of course you’re going to have some problems. ICAI seemingly wants to blame everything on the Big 4 probably because that’s the going trend these days. We’re not saying you can’t throw some blame towards PwC for missing the phantom $1 billion at Satyam but if your financial reporting regulatory infrastructure is akin to the something out of Deadwood, circa 19th Century, then maybe you should be more consider making some fundamental changes.
Fraud Rises in India as Competition Increases, KPMG Study Says [Bloomberg BusinessWeek]
Dennis Nally: PwC’s Credibility with Our Clients Is Doing Just Fine, Thankyouverymuch
Awhile back we told you about PricewaterhouseCoopers Global CEO Dennis Nally admitting that the PwC brand had been damaged because of the whole Satyam fraud.
DN has done another interview with the Indian press and he says despite this lit ng is on the up and up in India for PwC. The long/short of it is that Dennis & Co. are going to keep giving their clients the P. Dubs experience now and forever.
Pretty wide range of questions but we’ve presented the highlights for you.
Was the PwC Magic 8ball broken?
Q: When you look back at it do you think you could have avoided all that happened?
A: I don’t know if we could have avoided it. As we all know this was probably one of the most significant frauds that suddenly has taken place here in India but even in the global market place. So I do not know how you avoid that type of situation.
Where was the P. Dubs swagger when the shit hit the fan? Did you realize that everything was f’d and didn’t know what to do?
Q: [T]he firm didn’t seem to respond in a confident manner. The impression was that it didn’t know what it had been hit by. Do you think it could have been handled better?
A: I think with hindsight you can always do things better and that is part of learning and trying to deal with issues. But quite frankly this was a major event and of course it took us time to understand the pattern and what transpired.
In fact we are still learning and everybody is still learning. Now all the facts aren’t quite out yet but I think we are in the business of being out in the public and when something like this happens and it happens in a negative way, we are part of that. That is just a reality of being in a profession that we are involved with.
Why is this PwC’s fault?
Q: What role did the auditors have to play?
A: You are into an interesting debate and discussion because what is the role on a professional standards for the detection of a fraud. That is one of the areas that has been the focus not only on Satyam but a broader profession wide issue and we certainly welcome that debate.
I think there is an expectation out there in the public that auditors uncover every single fraud that they are involved with and that is not what professional standards call for but there is the public perception that that is what we are there to do. I define that as the expectation gap. If that is the expectation then we need to make sure that we are focused on the right kind of procedures, the right kind of standards, the right kind of reporting which is quite frankly really different than what we do today.
Will you stop all future frauds in India forever and ever and ever?
Q: Can you tell us if India will never see a Satyam again?
A: I wish I had a crystal ball but I don’t. As I said when you have a situation like Satyam or a major fraud I suspect somewhere in the world of corporate reporting, you are going to see another situation like that. Our job is to make sure we are doing everything we can possibly do consistent with the standards that are out there to ensure that we play our role in that process to avoid them.
The new India managing partner came from Singapore? You got something against Indians?
Q:But he has not come from India, you didn’t appoint him from the India firm – he was brought in from Singapore?
A: Gautam is originally from India which is great so it’s little bit of coming home programme.
Q: But it’s not a vote of confidence on the India management?
A: It is not. This is all about ensuring that we get the very best talent to focus on an important market like India and that’s exactly what we have done.
You let everyone down. Speak to them!
Q: A word to all those investors who felt disappointed with PriceWaterhouseCoopers for not alerting them to what was going on in Satyam. What is your message to them today?
A: Whenever we have situation like this, right or wrong, whatever standards are we are part of that and for that we regret what has happened. But this firm is about quality. It’s about doing the right things, it’s about being here for the investor community and we are very much focused on that.
Satyam fiasco has not dented credibility with clients: PwC [Money Control]
The Purpose of PricewaterhouseCoopers’ New HR Service in India Isn’t Entirely Clear
PwC has launched a new HR service in India and one can only speculate as to the inspiration behind staging the move there (I’ll give you a hint: it starts with Satyam and ends in fraud) but let’s take a look at the official spiel before we rush to judgment.
India’s Financial Express:
Global audit firm, PricewaterhouseCoopers, announced the launch of its human resources service ‘Saratoga’ in India along with India Human Capital Effectiveness survey (HCE), a top company official said.
“Saratoga is the most extensive database of HR metrics available globally. We are launching it in India and we have already got an immense response from Indian companies,” PricewaterhouseCoopers’ Partner and Global HRM network leader, Richard Phelps, told PTI here.
On the surface, Saratoga looks like little more than an inventory count of companies’ human capital, which means something when you have to keep a leash on a bunch of customer service guys with fake first names (how else would you keep track of them?).
See, PwC cares. They care that JP Morgan outsources call center jobs to India – I know this because I’m a Chase customer (leave me alone) and have had the misfortune of dialing in. Meanwhile, JPM’s off-shore hiring spree continues and someone’s got to handle all that “human capital”, why not PwC?
I don’t care that some guy in India has a job, I care that he calls himself Patrick and pretends to have a bizarre hybrid Texas/New Jersey accent. Is there going to be a check box on these PwC Saratoga metrics for guys who fake 50s-style American first names from Indian call centers?
I’m not bitter. It’s good that PwC cares about the global community and wants to reach out to facilitate cheap labor for its audit clients like JP Morgan (for the record I use BofA too and they have the decency to hire air-headed middle-state chicks named Kelly and Sarah).
Could you imagine what would happen if the Fed stepped in and barred PwC from auditing anything that’s moving here in the US? Hell, it happened in India.
Good luck with that human capital census or, uh, whatever it is, PwC. I mean that.
Dennis Nally: Satyam Scandal Has Damaged PwC Brand
While kicking it in Davos, Dennis Nally had to have known that eventually he was going to have to answer questions about his mother of all nightmares, Satyam. Having just passed the one year anniversary of the cat being let out of the bag about, you know, totally bogus numbers, everyone is talking about it. In India.
CNBC India caught up with Nalls and considering everything that’s going down, DN doesn’t seem worried. He’s leading P. Dubs full steam ahead into India; there’s no crying over failed audits, “Without question the firm has had real challenges in India but that has not changed my outlook and view on the importance of India economy to global economic picture.”
Stoic; as he should be. Not that the firm hasn’t had to do a little damage control. But no worries; Dennis is a man with a plan, “We just need to continue to deliver, service our clients, respond to their needs, help them deal with their issues and challenges. If we do that and we do that consistently over a period of time the PwC brand in India will be as strong and as good as it has been in the past and where we want it to be into the future.”
Plus, this is a blip, an outlier, a rare occurrence, “Any one-off instance can do harm to your brand and that is the reality. Our job is to make sure we are doing everything and we have done a number of things in India to ensure that this would not happen again,” so there’s no cause for concern.
This isn’t Tiger Woods brand damage we’re talking about. It will all be a distant memory before you know it.
Satyam scam has hurt PwC brand: Global Chairman [Money Control]