The US Securities and Exchange Commission has been struggling to get papers out of China to investigate possible accounting fraud at dozens of Chinese companies listed on US stock exchanges.
Auditing of US corporations' financial books, a vital underpinning of investor confidence, increasingly relies on work carried out in India, where there is no clear system of oversight.
The Public Company Accounting Oversight Board or the PCAOB did 2 things this month to improve communication between board audit committees and their audit firms.
It seemed like the perfect China play, a way for investors to cash in on the world's fastest growing economy.
PW India violated its most fundamental duty as a public watchdog - say the SEC and the PCAOB of Pricewaterhouse India’s role in the Satyam fraud. The two American regulators have imposed their largest ever penalties on PW India, USD 6 million by the SEC and USD 1.5 million by the PCAOB.
Now the post mortem of the global financial crisis laid a bulk of the blame on banks and financial regulators but in the last 6 to 8 months, its been the turn of auditors to face the heat.