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Last Updated: Friday, 23 May, 2003, 05:16 GMT 06:16 UK
PwC pays again in new audit scandal
Pwc logo and US dollars
PwC pays up again
PricewaterhouseCoopers, one of the world's leading accounting firms, has agreed to settle US government allegations of improper auditing with a $1m payment.

It is the second time in less than a year that PwC has been accused of improper professional conduct to do with its audit work.

PwC does not have to admit any wrongdoing in the deal with the US stock market regulator, the Securities and Exchange Commission (SEC).

The settlement comes almost a year after the industry promised to clean up its act following the conviction of fallen accountant Arthur Andersen for the obstruction of justice charges related to destroying of Enron audit documents.

In January the SEC sued another leading accountant, KPMG, claiming it fraudulently allowed Xerox to fiddle its accounts to cover-up a $3bn hole.

KPMG has denied the SEC allegations.

Latest scandal

Last July PwC paid a $5m settlement to the SEC and accepted an official reprimand over its auditing of 16 companies from 1996 to 2001.

The latest SEC investigation involved the 1997 audit of a pre-paid phone cards and wireless services provider SmarTalk TeleServices, which the SEC says is now bankrupt.

The SEC said PwC signed off a SmarTalk annual report "which contained materially false and misleading financial statements" involving a $25m reserve fund.

PwC agreed to put new policies in place to retain audit documents and review its computer software.

Wall Street scandals at a glance
12 Feb 03  |  Business

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