U.S. regulators have settled with accounting firm PricewaterhouseCoopers LLP (PwC), alleging that it violated auditor independence rules.
The U.S. Securities and Exchange Commission (SEC) announced Monday that PwC and one of the firm’s partners are paying US$7.9 million to settle allegations. Both the firm, and the partner, settled without admitting or denying the SEC’s charges.
The SEC reports that its order settling the case finds that PwC violated its auditor independence rules “by performing prohibited non-audit services during an audit engagement,” and that it also violated Public Company Accounting Oversight Board (PCAOB) conduct rules.
“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 Bandy, associate director of the SEC’s enforcement division, 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,” she added.
The monetary settlement is comprised of US$3.8 million in disgorgement, a US$3.5 million penalty, and over $600,000 in interest.
Along with the monetary sanctions, the firm agreed to beef up its quality controls. The partner is suspended from practising before the SEC for four years.