PricewaterhouseCoopers (PwC) is restructuring its auditing practice in India. The revamp will be steered by Rathin Datta, who took over as chairman and chief executive from April 1, 2003.
The move, according to the consultancy major, follows changes in auditing standards and the regulatory needs of corporates and banks to set up audit committees.
Datta, who has been with the company since 1971, has established a national team of auditors with industry specialists, breaking away from the firm’s traditional practice of a geographical set-up.
“After Enron and WorldCom fiascoes, regulators and audit committees have realised the need for quality advice and service in auditing,” Datta said.
“Indian audit committees, too, are becoming more vigilant and actively looking into matters,” he added.
On forming the specialist audit team, Datta said: “The industry’s expectations have risen. Corporates and banks want auditors to give value-added services. This is possible only if the auditor knows the ins and outs of the industry. Increasingly, we see industry specialism playing a big role in delivering value-added services to our clients.”
At PwC, advisory business has always been carried on a national basis, while the auditing line used to be geographic in nature.
Now, the company is driving a national policy and direction for its auditing team.
“It is not possible for large businesses to be audited by one or two persons,” Datta said.
Does this move means the line between auditors and consultants will diminish?
“No. There are certain things auditors can and cannot do. And what they can do as per the Narish Chandra Committee report is quite substantial. There is a line beyond which they cannot cross as laid down by the committee and the Sarbanes-Oxley Act of the US,” Datta added.
On the divestment front, where PwC expects to play a big role in terms of advising the government, Datta said privatisation of government-owned corporations does not simply mean selling off shares.
“It also means restructuring and beautifying the business to make it more robust and attractive for the buyer in order to get a better price,” he added.
