ICAI passes orders against five affiliates of Price Waterhouse
May 17, 2024
Synopsis
The Institute of Chartered Accountants of India (ICAI) has sanctioned five Price Waterhouse affiliates, two other entities, and two individuals for professional misconduct. The ICAI directed the entities to terminate existing arrangements with multinational entities, citing violations of the Chartered Accountants Act 1949. The implicated PwC affiliates include branches in New Delhi, Kolkata, Chennai, and Bangalore, among others. Dalal & Shah Chartered Accountants LLP and two chartered accountants were also penalized.
The Institute of Chartered Accountants of India (ICAI) has passed orders against five affiliates of auditing major Price Waterhouse, two other entities and two individuals for professional misconduct. In the orders issued this month, the disciplinary committee of the ICAI has directed that the entities concerned to immediately stop existing arrangements with the multinational entities, as the same is circumventing the provisions of the Chartered Accountants Act 1949.
The action has been taken against five PwC affiliates -- Price Waterhouse & Co LLP, New Delhi; Price Water House, Kolkata; Price Waterhouse & Co, Chennai; Price Waterhouse & Co Chartered Accountants LLP; Price Water House, Bangalore LLP. Others are Dalal & Shah Chartered Accountants LLP, Dalal & Shah LLP and two chartered accountants -- Dinesh Yashavant Supekar and Neeraj Kumar Gupta.
In similarly-worded orders dated May 8, the disciplinary committee said there was apparent sharing of human resources, infrastructure, brand name and contact details, which signifies that in substance, PwC was controlling the respondent firms and that it was "professional misconduct" under the Act.
According to the orders, the committee is of the view that the entities had entered into various agreements such as Accession Agreement, Name License Agreement and Firm Services Agreement which contain clauses that clearly violate the provisions of the Act.
"We are disappointed to note that the ICAI has published the said orders in the public domain, which is not in accordance with the court proceedings before the Hon'ble Delhi High Court, which was held in the presence of the ICAI Disciplinary Committee counsel.
"We have accordingly asked the ICAI to immediately take down the orders from their website," Price Waterhouse & Affiliates said in a statement.
It also said that these matters are of course not unique to us but are general industry-wide issues, and do not in any manner pertain to its audit procedures or the quality of delivery.
The committee has directed the removal of the name of Gupta from the register of members for three years in the six cases related to Price Water House, Kolkata; Price Waterhouse & Co., Chennai; Price Waterhouse & Co. Chartered Accountants LLP; and Price Water House, Bangalore LLP. Others are Dalal & Shah Chartered Accountants LLP, and Dalal & Shah LLP.
The removal period will be concurrent in all six cases.
Besides, a fine of Rs 5 lakh has been slapped on him separately in the six cases.
With respect to Price Waterhouse & Co LLP, New Delhi, matter, the name of Supekar will be removed from the register for three years and a fine of Rs 5 lakh has also been imposed on him.
In the related order, the committee said that "visiting cards of the personnel of respondent firm contains suffix "@pwc.com" in their email id(s), which depicted their close association or linkage with the international entity".
"Further, the Name License Agreement signed between PwC Business Trust (an entity set up under the laws of USA and owner of the brand 'PricewaterhouseCoopers') contains clauses which permit the respondent firm to use the trademark PwC.
"The respondent firm/ respondent in their submissions have failed to point out as to how they were able to maintain their independence when the domain that was being used belonged to the third party i.e. multinational entity," the order said.
Also, it said the respondent firm with the name Pricewaterhouse used the domain name
Last month, the ICAI passed orders against three EY affiliates for 'professional misconduct'.
[The Economic Times]
