April 22, 2018, 8:04 am IST
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Ban on PwC may hit audit of Tata Steel, Hindalco

Ban on PwC may hit audit of Tata Steel, Hindalco

 Jan 12, 2018

Securities and Exchange Board of India’s (SEBI’s) order banning the PricewaterhouseCoopers audit firms (PwC firms) from auditing for two years will affect 77 NSE-listed firms, according to data compiled by Prime Database. The firms for which PwC are working as auditors include big companies such as Hindalco Industries, Tata Steel, Ashok Leyland, IDFC, IndusInd Bank and Reliance Capital.

Business experts say that the new uncertain situation will create a big crisis because these listed companies will soon have to scout for new auditors. As the size of the companies are huge with a turnover of more than $1500 crore. So it is quite impractical to fit in with other qualified auditing firms all of a sudden.

Apart from this, Sebi's ruling could also raise questions about PW network entities' auditing of unlisted and other entities. If it is so, the auditing of scores of medium and small firm also will be affected.

Price Waterhouse’s India network is made up of 11 chartered accountant firms with about 3,000 employees. Experts calculate that the revenue impact of the ban will have on PW firms’ India operations will be around 20-30%. In FY17, the audit firm network earned upwards of Rs. 81 crore in audit fees from its roster of listed clients.

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