KPMG is not eligible to audit

Claiming that KPMG is not a registered auditing firm falling under the regulatory ambit of the Institute of Chartered Accountants of India ICAI,the institute has written a letter to the board of directors of Satyam Computer Services asking them to appoint another auditing firm that is registered with the ICAI. Restatement of accounts comes under assurance services,which can be done only by a chartered accountant or firm registered with ICAI. Therefore,a company like KPMG which is not registered with the institute and,hence,falls outside its regulatory purview can not be delegated such a responsibility, Uttam Prakash Agarwal,vice-president,ICAI and chairman of the high-level committee formed by ICAI to look into the Satyam matter,told The Indian Express.

The newly constituted three-member board of Satyam had yesterday appointed international auditing firms Deloitte and KPMG to restate the company financial statements and get the real picture on the financial position of the company. ICAI president Ved Jain commented today on the inappropriateness of KPMG auditing Satyams books. He said,KPMG is not allowed to practice in India8230; they are not registered with us. KPMG cant be the auditor. We are making it clear that any representation to be made by KPMG to Satyam board cannot be done.

KPMG,however,was reported to have commented on Jain statement,saying,We are working with the new board of Satyam Computer Services. The scope of work and terms of reference are being discussed with a view to their finalisation. Jain,however,went a step further to add,Satyam board should be aware that its not appointing KPMG and its appointing BSR Associates,which is its Indian arm8230; on the basis of credential of a local firm,the board should not apply its mind.