In the US, Arthur Anderson was destroyed as an entity for fudging Enron.
Actually, it was simply killed by the initial indictment, which for an auditor is a death sentence. Several years later the Supreme Court unanimously reversed (http://en.wikipedia.org/wiki/Arthur_Andersen_LLP_v._United_S...), but by then it was way too late. I.e. this was a typical abusive political Federal prosecution; Enron in general gave the usual suspects an excuse to wreck horrific damage, including most especially SarBox which was the final nail in the coffin of the VC funded hi-tech startup business model.
As for Satyam, at least in US auditors proceed from the assumption that the company it not lying to them and they do some spot checks to verify (e.g. "You say you have 150 widgets of this type in that warehouse; let's go look at them." And "You say you have 29 crores in this account at that bank; call the bank and authorize them to tell us about the account."). If the company is sufficiently fraudulent, as I recall reading Satyam was, auditor malfeasance is not assumed, you check to see if the auditor's verification procedures were reasonable and if they ignored anything they shouldn't have, but otherwise you can't assume they too were corrupt.
Auditing is expensive from both sides, the auditor and the company being audited, where a number of people are tasked with supplying the auditor the information they need and demand (e.g. those verification checks). If a company is running a sufficiently sophisticated scam, e.g. their official books are very carefully constructed fiction, I don't see how their pushing out regular records would help. I.e. the way they pull off their scam is to continuously make everything look good, as opposed to trying to put together a false set of books just before the audit, which would likely result in enough errors auditors would have a good chance of catching them.
Actually, it was simply killed by the initial indictment, which for an auditor is a death sentence. Several years later the Supreme Court unanimously reversed (http://en.wikipedia.org/wiki/Arthur_Andersen_LLP_v._United_S...), but by then it was way too late. I.e. this was a typical abusive political Federal prosecution; Enron in general gave the usual suspects an excuse to wreck horrific damage, including most especially SarBox which was the final nail in the coffin of the VC funded hi-tech startup business model.
As for Satyam, at least in US auditors proceed from the assumption that the company it not lying to them and they do some spot checks to verify (e.g. "You say you have 150 widgets of this type in that warehouse; let's go look at them." And "You say you have 29 crores in this account at that bank; call the bank and authorize them to tell us about the account."). If the company is sufficiently fraudulent, as I recall reading Satyam was, auditor malfeasance is not assumed, you check to see if the auditor's verification procedures were reasonable and if they ignored anything they shouldn't have, but otherwise you can't assume they too were corrupt.
Auditing is expensive from both sides, the auditor and the company being audited, where a number of people are tasked with supplying the auditor the information they need and demand (e.g. those verification checks). If a company is running a sufficiently sophisticated scam, e.g. their official books are very carefully constructed fiction, I don't see how their pushing out regular records would help. I.e. the way they pull off their scam is to continuously make everything look good, as opposed to trying to put together a false set of books just before the audit, which would likely result in enough errors auditors would have a good chance of catching them.