Indian Technology/IT News

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<b>Satyam Said to Draw SEC Scrutiny in $1 Billion Accounting Case</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Satyam Chairman Ramalinga Raju said on Jan. 7 that he had fabricated $1 billion of cash and assets, sparking an 85 percent plunge in the stock. American depositary receipts for the Hyderabad-based company trade in New York, requiring it to file financial statements with U.S. regulators and submit to their jurisdiction.

<b>“It’s too big a matter for the SEC to take a pass,” </b>said Charles Clark, a former SEC enforcement attorney who now works at Kirkland & Ellis LLP in Washington. “<b>What will make it challenging is the practicalities of investigating a fraud in a country that’s incredibly far away</b>
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The SEC will probably examine whether Satyam’s auditor, <b>Price Waterhouse India, overlooked irregularities and may look into what role the accounting firm’s U.S. affiliate played in checking financial reports</b>, said James Coffman, a former SEC attorney who investigated auditors including Arthur Andersen LLP.

<b>“Even if the U.S. firm didn’t perform the audit, they may have been reckless in terms of signing off on the audit or knowing that the audit didn’t comply” with U.S. accounting standards,</b> Coffman said. Regulators haven’t accused the auditing firm of wrongdoing in the case.
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