South African watchdog targets PwC
New audit watchdog flexes its muscles
PricewaterhouseCooopers is facing a preliminary investigation by South
Africa’s new auditing watchdog, the Independent Regulatory Board for Auditors
(IRBA), over its audit work at a leading gold mining company.
According to a report in the Business Times, the IRBA will
investigate the work of PwC as auditor of Randgold & Exploration’s 2003
accounts.
This follows a report by forensic investigators from Umbono Financial
Advisory Services, which found that R&E’s financial statements for the 2003
financial period ‘grossly misrepresent the financial position of the company’.
Kariem Hoosain, head of the IRBA, said he had asked the watchdog’s legal
department to start looking at an investigation.
‘We first need to start collating information, though, to build up a case
that will warrant a full investigation,’ he added.
If found guilty of not complying with acceptable reporting standards, PwC
partners could face a range of sanctions including fines, suspension and being
struck off the auditing roll.
A PwC spokesperson was reported as saying the firm was still trying to make
sense of the claims made against it and had not yet seen the forensic report.
PwC resigned as auditors of Randgold at the end of 2003.
Randgold plans to relist on the NASDAQ and the Johannesburg Stock Exchange.