Watchdog to probe PwC over Cattles audit

Accountancy's watchdog is investigating PricewaterhouseCoopers over its audit work at troubled personal finance lender Cattles.

The Accountancy and Actuarial Discipline Board is investigating the conduct of PwC and its audit staff in relation to their work as auditors of Cattles, the sub-prime lender which faced an £850m black hole in its accounts.

The scope of the investigation is as follows:

1. The preparation, approval and audit of the financial statements of
Cattles plc and Welcome Financial Services Limited for the year ended
31 December 2007;

2. The preparation, approval and review of the interim financial
statements of Cattles plc for the six months ended 30 June 2008; and

3. Public statements covering the financial position and performance of
Cattles plc and/or Welcome Financial Services Limited between 28
February 2008 and 20 February 2009.

'We will fully cooperate with the AADB investigation and will vigorously defend our work,' PricewaterhouseCoopers said in a statement.

Problems were flagged up at Cattles back in February, which set of a chain of events which saw an independent review by Deloitte. A number of senior finance professionals were then sacked from the group, including outgoing FD James Corr.

Further reading:

The Cattles saga: Timeline

Cattles FDs among sacked six

Ex-Deloitte restructuring expert joins troubled Cattles as interim FD