So what were the auditors, PricewaterhouseCoopers, doing? There was no cash with in the company's banks and yet the auditors went ahead and signed on the balance sheets saying that the money was there.

Not just the cash, even they even signed off on the non-existent interest that accrued on the non-existent cash balance!

Auditors do bank reconciliation to check whether the money has indeed come or not. They check bank statements and certificates. So was this a total lapse in supervision or were the bank statements forged? No one knows yet. The cops have already raided the PwC office in Hyderabad, but details of what they have found are yet to emerge.

The company officials said they relied on data from the reputed auditors. But PricewaterhouseCoopers, stung by this insinuation hit back at Satyam. In a statement to the media, the firm said: �The audits were conducted by Price Waterhouse in accordance with applicable auditing standards and were supported by appropriate audit evidence. Given our obligations for client confidentiality, it is not possible for us to comment upon the alleged irregularities. Price Waterhouse will fully meet its obligations to cooperate with the regulators and others

SatYam - an insight story