Business Case Studies & Business Publications

Statutory Auditors and Professional Negl...

Ram Mohan, M.P

Case

Statutory Auditors and Professional Negligence in India: The case of Price Waterhouse v. SEBI

Ram Mohan, M.P

IIMA-BP0441 | Published March 31, 2020 | 11 pages Case

Collection: Indian Institute of Management, Ahmedabad

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Learning Objectives

The case study of Price Waterhouse Bangalore's audit of Satyam Computer Services Limited is an instructive one with respect to the liability of auditors under SEBI regulations. The series of decisions arising from Price Waterhouse's audit of Satyam shed light on the jurisdiction of the Securities and Exchange Board of India over auditors and the legal standards applied to determine their liability under securities regulations.

What is the test for determining the professional negligence of auditors? When does SEBI have the jurisdiction to issue directions to auditors? What is the nature of proof required to establish the participation of auditors in the commission of fraud under securities regulations? When can liability for negligence be attributed to Networks of auditors/firms?