Pwc named in fresh scandal in UK, fined a record-breaking 10m pounds

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Kagenyi Lukka

By Kagenyi Lukka.

At this time, one wonders what is left of pricewaterhousecoopers (PWC) as its reputation continues fold and get soiled each day and year that passes.

A no novice to shoddy work, not following proper audit procedures among others, pwc has been once again reprimanded and slapped with a hefty fine of 10 million pounds by the Financial Reporting Council (FRC) over their 2014 audit of BHS and the Taveta Group.

This figure was reduced by 35% to £6.5m for early settlement, which has been approved by an independent tribunal. However, it still remains the largest-ever sanction issued by the U.K. accounting regulator.

As if fining Pwc wasn’t enough, its senior partner Steve Denison who admitted misconduct was disgracefully banned from conducting any auditing work for a period of 15 years and also fined 350000 pounds. Denison had worked with pwc for over 32 years.

In 2015 Mr. Denison signed off the BHS accounts as a going concern, just days before it was sold for £1.BHS would later collapse in 2016 with the loss of 11,000 jobs and a pension deficit of £571m marking  the biggest collapse in the British retail industry since the demise of Woolworths in 2008.

Pwc admits falling below standards

In a statement issued by pwc in the wake of embarrassing news, the audit firm regretted. However, this can only do so much.

“We are sorry that our work fell well below the professional standards expected of us and that we demand of ourselves,” the company said.

“At its core this is not a failure in our audit methodology; the methodology simply was not followed.”

Pwc, a firm of misconducts, shortfalls, fined twice in 2017.

Pwc has always dominated the list of sanctions and breaks its own records of receiving the largest ever penalties. It was fined two times in 2017!

In 2017 August, PWC LLP was fined 5.1 million pounds ($6.6 million) for misconduct over its audit of RSM Tenon Group Plc which was by then, the largest-ever sanction issued by The Financial Reporting Council, UK’s accounting watchdog. Its senior partner Nicholas Boden was also penalized. Similarly, pwc admitted it had fallen short of standards according to the statement issued by its spokesperson.

In a related development, In May, 2017 PwC incurred another record fine for misconduct over its audit of Connaught Plc, a FTSE 250 company that went into administration in 2010. The Financial Reporting Council issued a 5 million-pound sanction against the auditor over the Connaught work as well.

Pwc banned, fined elsewhere

In January 2018, India’s securities regulator banned the global accountancy firm PwC from auditing listed companies in the country for two years after it failed to spot a $1.7bn fraud at the now defunct Satyam Computer Services .Satyam inflated its revenue by accounting for 7,561 fake invoices.Pwc was not able to independently verify such.

In 2017 PwC was also banned in Ukraine over an accounting black hole worth billions at Privatbank. Privatbank was one of Ukraine’s top banks and PWC was the auditor from 2007-2015. In December 2016 Privatbank was nationalized after a $5.5bn capital shortfall was discovered by the country’s central Bank, NBU.

Privatbank filed legal proceedings against PwC, claiming it suffered losses as a result of “serious and extensive breaches by PwC of its duties and responsibilities”. It is seeking damages of $3bn from PwC’s Cyprus and Ukraine branches in relation to their auditing work at PrivatBank between 2013 and 2015.

In Uganda, pwc has been adjudged as conflicted. This is why there was public protest after it had been shortlisted for the BoU forensic audit yet it had audited crane bank between 2008-2010

With all the above belabored, pwc can be characterized as a firm dogged by misconduct, unprofessionalism and scandal riddled because in all cases, the firm has always admitted not doing right, and enough to detect elements such as fraud. Uganda can’t be a dumping place for such mischievous companies and their practices that have been detested elsewhere.

Kagenyi Lukka is a current affairs analyst and the next MP,Ikiiki.

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