BUSINESS

The ICAI issued a misconduct order against PwC companies

Price Waterhouse & Co. in New Delhi as well as its network businesses have been subject to a disciplinary order by the Institute of Chartered Accountants of India (ICAI) for professional misconduct.

 

Two members have also been struck from the register of members for a three-year term and fined Rs 5 lakh each by the May 8 ruling.

The ICAI committee discovered throughout its examination that Price Waterhouse & Co. employees’ visiting cards and emails included the suffix “@pwc.com,” indicating their strong ties to the global organization.

Furthermore, the committee said that PwC Business Trust, an organization formed in accordance with US law and the owner of the PricewaterhouseCoopers brand, signed a name licensing agreement that includes provisions allowing Price Waterhouse & Co, New Delhi to use the PwC trademark.

“The respondent business has not explained in their comments how they were able to maintain their independence while the domain in question belonged to a third party, such as a multinational corporation.

The ICAI ruling said that the Pricewaterhouse respondent company had engaged in professional misconduct as defined by the first schedule of the Chartered Accountants Act of 1949 by using the domain name “@pwc.com” to capitalize on its goodwill with a global corporation.

According to the ruling, the ICAI’s disciplinary committee has already discovered what seems to be a pooling of infrastructure, brand name, contact data, and human resources, indicating that PwC was really in charge of Price Waterhouse & Co. in New Delhi as well as network businesses.

The ICAI has already issued an order against well-known audit companies, like SR Batliboi & Co., for breaking the CA Act, before PwC and its local affiliates. However, the ruling against EY affiliate businesses was eventually taken down from the ICAI website as a result of the Delhi High Court’s stay order.

Price Waterhouse & Affiliates responded, saying, “We regret that the ICAI has made the aforementioned orders public. This is not consistent with the court proceedings before the Hon’ble Delhi High Court, which were held with counsel from the ICAI Disciplinary Committee present.

As a result, we have requested that the ICAI remove the orders from their website right now. Naturally, they are not exclusive to us; rather, they are widespread problems in the business that have nothing to do with our auditing practices or the quality of our work. We are unwavering in our resolve to maintain and follow the relevant laws, and we have complete confidence that the legal system will support our stance on these issues.

For a considerable amount of time, the ICAI has argued that local audit firms linked with the global Big Four are less independent when they are a member of a worldwide network. These connections also lead to cost sharing with the global network, which is prohibited under the California Civil Code.

The Big Four, on the other hand, contend that the development of common tools, tech platforms, training materials, and governance structures is facilitated by the worldwide connections.

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