Mumbai: Gautam Banerjee “has hit the ground running" after taking over less than two months ago as the chairman of PricewaterhouseCoopers Pvt. Ltd (PwC), India’s largest audit firm. He was brought in after PwC auditors became enmeshed in the Satyam Computer Services Ltd scam that broke in January 2008. Banerjee, 55, spoke in an interview about Satyam and issues such as the departure of a number of senior tax specialists. Clients are loyal to the firm and not to individuals, said Banerjee, who also heads PwC’s Singapore operations. Edited excerpts:

Bullish: Banerjee says PwC will make the audit steps more robust. Abhijit Bhatlekar / Mint

After the Satyam scam broke, PwC said it was carrying out its own checks? Have you established any wrongdoing within the firm?

We did a number of procedures. Our forensic work has not indicated any of our team members were complicit in this (the Satyam scam), that either they knew or intentionally disregarded matters or whether they were working in concert with those guilty. Nothing has come to light.

Have you completed the forensic auditing?

We have done most of the work.

Have you given a clean chit to the two (auditors) after the forensic audit?

The issue in audit is a lot more information comes to light after the event. It is never the same as when the audit was done. In real time, things are different. Obviously, after the audit, the teams reviewing have more information on the table. What actually happened when the audit was done is difficult to recreate. What we are trying to do going forward is to make the audit steps more robust in the sense one of the issues in Satyam was the whole thing of fraudulent documents.

Now that Srinivas Talluri (one of the two senior PwC auditors allegedly involved in Satyam) is out on bail, will the firm try to rehabilitate him?

What do you mean rehabilitating him. We would have to wait for other investigations to be completed and so on. We also have to consider public perceptions as well, before bringing him back to do audit. And whether he himself is in the frame of mind. We have to look into all that. He’s come back after 13 months in jail.

PwC has several class action suits pending in the US courts?

Some foreign investors have filed cases. We want to bring the jurisdiction to India.

But isn’t PwC headquartered in the US? And the new Mahindra Satyammanagement believes that they themselves were victims?

Yes, but primarily Satyam is an Indian company with Indian shareholders and a few foreign shareholders. So it is very much an Indian case. And PwC India is an Indian firm. It is not only us. Everybody, including the directors of Satyam, have a responsibility. The Satyam board has a primary responsibility. There is a question of sovereignty as well. This is where the company operated. If you have a precedent of taking it to US courts, it becomes very expensive. It is a dangerous precedent to set.

Your global chairman visited India at least twice after the Satyam scam and admitted it has affected the reputation of PwC. How do you tackle this?

We had issues for a year now. The best way is to reach out to our clients. Our challenge is to convince our clients that PwC is an organization that they can work with and we think we have been successful. In fact, before I joined as chairman, a lot of measures had been taken on risk and quality control in PwC India and we have to assure people that we are doing the right thing. We have set up an advisory board with prominent members.

PwC’s international auditors have been reviewing the work of its Indian affiliates. How many accounts are being reviewed by the international team?

We wanted to make sure that we are not missing anything. We did this for our public entity clients (listed companies). We want to do that to get an extra assurance. That is the cost and one of the investments we are making to ensure that our quality and deliverables meet the standards our clients expect of us.

Right path: PwC’s Banerjee. Abhijit Bhatlekar / Mint

What are the main takeaways from past experiences such as Global Trust Bank and now Satyam?

I think we can do the best in audit for a right client. If it is not a right client, then we end up in a difficult situation. If the fraud is perpetuated by top-level managers, it is difficult to pick up such as in Satyam.

First we have to make sure that the client has the right management, right kind of independent directors on board who can challenge decisions taken by the management, directors who can have contrarian views on management decisions.

Have you shed some ‘wrong’ clients?

We are actually looking into that.

Any number?

It won’t be right to put any number.

The firm recently saw an exodus of tax specialists.

There is a huge demand for professional services in an emerging economy such as India. The demand exceeds the supply. They thought they could do well outside PwC. The offers came from firms that wanted to scale up tax practice. In China, we are the biggest after the merger of our operations in Hong Kong and China, and the acquisition of the Andersen (Consulting) business. As new firms set up offices in China, they hired professionals from our firm. It happens everywhere.

Your Indian assignment is quite a handful, but you continue to hold dual posts.

I continue to be chairman of the Singapore firm. (India incumbent) Ramesh Ranjan’s term ends on 31 March 2011. My job is to stabilize the firm, get the firm on the right course and let the firm elect the next chairman. I am certainly not going to be here to stand for elections. I’ll be retiring in a few years’ time. My role is fill the vacancy, stabilize operations and let the partners choose their own chairman.

There was some talk that in your appointment, there were no elections.

A committee constituting partners can select an interim chairman. It is not very sinister, the partners were consulted and by the way the only time an election took place was when Ramesh was elected. Otherwise, the chairman’s post was given in the form of seniority. Both these methods are not ideal measures. In an organization, a secret ballot can become very divisive. A smooth election plan through broad-sounding colleagues is an ideal way to elect a chairman. That is the way I was selected for two terms in Singapore.

You also have a deputy chairman assisting you. Isn’t this a new post?

Someone (Peter Harvey from PwC, UK) in the network is helping me. It is an internal role, because I am not in India 100% of the time. I am going to review that post later.