PWC fined Shs 29 billion for violating audit rules
PricewaterhouseCoopers in the US has agreed to pay $7.9 million (Shs 29 billion) to settle charges with the Securities and Exchange Commission for violations of auditor independence rules.
The global audit firm is accused of improperly performing IT and other non-audit services for audit clients.
The SEC also charged PwC partner Brandon Sprankle, who specializes in Oracle security controls, with causing PwC’s independence violations.
“PwC takes independence and its important role in the capital markets seriously,” the firm said in a statement Monday.
“PwC is pleased to have resolved this matter and remains committed to continuous improvement. Through our ongoing efforts, we have and continue to add additional processes and controls to maintain independence.”
PwC violated auditor independence rules by doing prohibited non-audit services during an audit engagement, according to the SEC’s order, including exercising decision-making authority in the design and implementation of software relating to an audit client’s financial reporting, and engaging in management functions.
The firm also didn’t fully inform the audit committees at 15 of its clients about the work it was doing and the potential impact on independence.
The SEC blamed the firm for breakdowns in its independence-related quality controls, leading to a failure to properly review and monitor whether non-audit services for audit clients were permissible and approved by clients’ audit committees.
“Auditors play a fundamental role in protecting the reliability and integrity of financial reporting and must ensure that non-audit services do not come at the cost of their independence on audits of public companies,” said Anita B. Bandy, associate director of the SEC’s Division of Enforcement, in a statement.
“PwC repeatedly provided non-audit services without having effective quality controls in place for monitoring whether the services impaired its independence on audit engagements and were properly disclosed to audit committees.”
