PwC comes under the scanner

Buying shares in a company has a lot to do with trust. While common investors don't necessarily know the people who run the firm, they buy the shares as they come packaged with a form of guarantee.

To calm investors' fears, company reports are rigorously audited, capped with the asurance that they "represent fairly, in all material aspects". Auditors are appointed as overseers to make sure that all financial statements are the absolute truth.

In case of Satyam, the role of the auditor PricewaterhouseCoopers (PwC) has come under scrutiny.  PwC has been Satyam's auditor  since 2000 and it can hardly play the innocent victim.

PwC may face criminal action for allowing India's largest corporate fraud to proceed under its nose. The firm has been named in the First Information Report filed by the police, which marks the first step in a criminal investigation.

The Satyam scandal has raised serious questions about the role played by PwC as an auditor. During the period 2003-2008, while the accounting fraud was going on at Satyam, PwC's fee from Satyam increased three-fold, while other IT giants in India had not increased their auditors' fees as much.

In fact, PwC was paid up to thrice the fee paid by the larger top-3 IT companies to their auditors.