Submitted by Adrienne Gonzalez, republished from Going Concern, Accounting News for Accountants and CFOs.
Now £15.7 billion may not seem like much to you if you are, say, Bill Gates or Ben Bernanke but for PricewaterhouseCoopers UK, it may be the magic number that gets the firm into a whole steaming pile of trouble.
UK regulators allege that from 2002 to 2009, PwC client JP Morgan shuffled client money from its futures and options business into its own accounts, which is obviously illegal. Whether or not JP Morgan played with client money illegally is not the issue here, the issue is: Will PwC be liable for signing off on JPM's activities and failing to catch such significant shenanigans in a timely manner?
PwC did not simply audit the firm, they were hired to provide annual client reports that certified client money was safe in the event of a problem with the bank. Obviously that wasn't the case.
The Financial Reporting Council and the Institute of Chartered Accountants of England are investigating the matter, and the Financial Services Authority has already fined PwC £33.3 million for co-mingling client money and bank money. That's $48.8 million in Dirty Fed Notes if you are playing along at home.
Good luck with that, PwC. We genuinely mean that.
Inquiries mount after PwC ‘failed to notice' mistakes [Times UK]