The Hindu : PwC's $5m settlement with SEC

Online edition of India's National Newspaper
Thursday, Jul 18, 2002

Business

Business

PwC's $5m settlement with SEC

WASHINGTON JULY 17. PricewaterhouseCoopers LLP has agreed to pay $5 million to settle three separate enforcement actions by the Securities and Exchange Commission (SEC) alleging violation of independence standards and improper accounting, media reports said today.

The agreements with the SEC will outline accounting violations involving two audit clients, Pinnacle Holdings Inc. and Avon Products Inc. A third case involves independence violations by the firm's broker-dealer, PwC Securities.

In a letter dated yesterday, PricewaterhouseCoopers Chairman, Dennis Nally, disclosed to the firms' partners that the SEC settlement was imminent and that the firm, without admitting or denying the allegations, had agreed to pay a fine and make improvements to audit procedures.

"Despite the potential for unfavourable publicity,'' Mr. Nally wrote, "we believe that settling these issues now is in the best interest of our firm and our clients.''

The SEC, said the Wall Street Journal believes the settlements are highly significant because they demonstrate how consulting-fee arrangements allegedly led directly to the audit clients' improper accounting. — PTI

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