PricewaterhouseCoopers

About PwC
PricewaterhouseCoopers (or PwC) is one of the world's largest professional services firms and the largest of the Big four auditing firms. PricewaterhouseCoopers earned aggregated worldwide revenues of US$26.2 billion for the fiscal year 2009, and employed over 163,000 people in 151 countries. In the United States, where in 2009 it was the eighth largest privately owned organization, it operates as PricewaterhouseCoopers LLP (limited liability partnership). PricewaterhouseCoopers is a big four auditor, alongside KPMG, Ernst & Young and Deloitte Touche Tohmatsu (DTT).

Formation of PricewaterhouseCoopers.
The firm was created by the merger of two large firms Price Waterhouse and Coopers & Lybrand in 1998. Samuel Lowell Price, an accountant, started his practice in London in 1849. In 1865 Price went into partnership with William Hopkins Holyland and Edwin Waterhouse. Holyland left shortly after to work alone in accountancy and the firm was known from 1874 as Price, Waterhouse & Co. As a result of trade between the United Kingdom and the United States of America, Price Waterhouse opened an office in New York in 1890. In 1998, Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers.

Services Offering By PWC

Audit and Assurance Financial accounting Financial statement audit Internal audit Consulting Strategy Finance Technology Investigations Tax Indirect taxes International tax services Mergers & acquisitions Tax accounting services Human resources International assignments Reward HR management Legal services Asset management Employment Financial services Real estate

Clients

PricewaterhouseCoopers Failures!!!

Willie Nelson
In 1990, the Internal Revenue Service seized most of the assets of Willie Nelson, claiming he owed $32 million in back taxes, including penalties and interest. He sued Price Waterhouse, contending that they put him into tax shelters that were later disallowed by the IRS. The lawsuit was settled for an undisclosed amount.

American International Group Inc.

PwC was American International Group Inc.'s auditor through years of "questionable dealings." AIG on 30 March 2005 said that deals with a Barbados-based insurance company, for instance, may have been incorrectly accounted for over the past 14 years, because an AIG-affiliated company may have been secretly covering that insurer's losses. It is said that PwC appears to have "dropped the ball" on the deals between AIG and Berkshire Hathaway Inc.'s General Re Corp. General Re transferred $500 million in anticipated claims and premiums to AIG. BusinessWeek asked: "Did the auditor do its job by verifying that AIG was assuming risk on claims beyond the $500 million, thus allowing AIG to account for the deal as insurance? That's Accounting 101 in any reinsurance transaction."

ChuoAoyama Suspension
From 2000 to 2006, PwC's affiliate of assurance service in Japan was ChuoAoyama Audit Corporation. In May 2006, the Financial Services Agency of Japan suspended ChuoAoyama from provision of some statutory auditing service for two months following the collapse of cosmetics company Kanebo of which three of the firm's partners were found assisting with accounting fraud for boosting earnings by the company of about $1.9 billion over the course of five years. The accountants got suspended prison terms up to eighteen months from the Tokyo District Court after the judge deemed them to have played a "passive role" in the crime. The suspension was the first ever imposed on a major accounting firm in the country. Many of the firm's largest clients were forced to find replacement auditors before the suspension began that July. Shortly after the suspension of ChuoAoyama, PwC acted quickly to stem any possible client attrition as a result of the scandal. It set up the PricewaterhouseCoopers Aarata, and some of ChuoAoyama's accountants (but most of the international divisions) moved to the new firm. ChuoAoyama resumed operations on September 1 under the Misuzu name. However, by this point the two firms combined had 30% fewer clients than did ChuoAoyama prior to its suspension. Misuzu was dissolved in July, 2007.

Tyco settlement
In July 2007, PwC agreed to pay US $229 million to settle a class-action lawsuit brought by shareholders of Tyco International Ltd. over a multibillion-dollar accounting fraud. The chief executive and chief financial officer of Tyco were found guilty of looting $600 million from the company.

Satyam case
The audits were conducted by Price Waterhouse Cooper in accordance with applicable auditing standards. As per Satyam's accounts, vetted by Price Waterhouse, auditors were paid Rs 373 crore during 2007-08 as against Rs 367 crore in the previous fiscal. Credibility of audit firms has come into question as the amount was too big for any audit firm not to notice. If the audit firm claims that they didnt know about then their capabilities would come under the scanner,

 Two partners of PricewaterhouseCoopers, Srinivas Talluri and Subramani Gopalakrishnan, have been charged by Indias Central Bureau of Investigation in connection with the Satyam scandal.
Subramani Gopalakrishnan retired from the firm after reaching mandatory retirement age, while Talluri remains on suspension from the firm.

Yukos prosecutions
In November 2010, The New York Times reported that PwC had been assisting the Russian Government with prosecutions in relation to alleged tax evasion at Yukos stating "...Then, in 2007, with the prospect of parole on the horizon, the same prosecutors with what appears to be the complicity of PricewaterhouseCoopers, Yukoss longtime accounting firm indicted the two men (Mikhail B. khodorkovsky and Planton Lebedev), again, bringing a new round of Kafkaesque charges. A cable from the US embassy in Moscow stated that the trial was politically motivated and that a deposition in a US court by PricewaterhouseCoopers may show that PwC was pressured by the Russian government to withdraw its prior Yukos audits. An embassy source noted that if the audits were not properly withdrawn it "would greatly tarnish PWC's international reputation." Russian authorities were investigating PwC for tax evasion, but suspended the investigation once PwC withdrew the Yukos

Global Trust Bank Ltd and DSQ Software

India's accounting standards agency ICAI is investigating partners of PwC for professional negligence in the nowdefunct Global Trust Bank Ltd. case of 2007. Like Satyam, Global Trust Bank was also based in Hyderabad. This led to Reserve Bank of India banning PwC from auditing any financial company for over a year. PwC was also associated with the accounting scandal at DSQ Software in India. Following the Satyam scandal, the Mumbai-based Small Investor Grievances Association (SIGA) has requested the Indian stock market regulator SEBI to ban PwC permanently and seize its assets in India alleging few more scandals like "Ketan Parekh stock manipulations."

Transneft Russia case

The construction of the ESPO (East Siberia-Pacific Ocean) pipeline by Transneft was estimated to cost in excess of US$13 billion. A leaked report of the Audit Chamber of the Russian Federation indicated that the total amount stolen and siphoned from the company during construction through various mechanisms and schemes reaches up to USD 4 billion. A Moscow Times editorial stated that one of the chambers auditors attempted damage control by saying in effect, Yes, money was stolen, but not as much the media reported. PricewaterhouseCoopers (PwC) was Transnefts auditor and denied wrongdoing saying We believe there are absolutely no grounds for such allegations, and we stand behind our work."

House of Lords inquiry in the UK

In 2011, a House of Lords inquiry specifically criticized PwC for not drawing attention to the risks in the business model followed by Northern Rock, a client of the firm, which was rescued by the UK government during the financial crisis