Wednesday, July 1, 2009

We Know What You're Doing PwC and We Don't Like it

A little more salt on the wound known as Satyam for PwC, courtesy of Re: The Auditors (RTA). We posted yesterday that PwC really didn't audit Satyam, that it was a P. Dub associate firm, Lovelock & Lewes.

RTA makes the excellent point that the confusion about who is actually doing what is no accident:
The fact that no one except those closest to it understand the structure is not by default but by design. It is designed to accomplish just exactly what they are trying to accomplish now - to weasel out of responsibility and liability when something goes wrong. But it’s not unique to India or PwC. In some countries, New Zealand for example, there may be many firms operating under the KPMG New Zealand umbrella but they are no more aligned financially or strategically than Christchurch is with Tokyo.
So the firms' international entity structure is confusing precisely because they know that when the shit hits the fan, they can always jump behind corporate plausible deniability. This is exactly what happened in the BDO case (as RTA notes) via the "wedding planner" defense.

The firms have international presence, marketing themselves as international companies, yet hide behind an enigmatic entity structure to save their asses when they mess up.

Well played...One jury already bought it. P. Dubya better be saying their prayers that they're just as lucky...

PwC Global Board: “Risk And Quality Top Priorities”
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