Big Four firms face legal action in Australia

PricewaterhouseCoopers and
KPMG are facing legal action from
clients in Australia.

PwC is facing action from the Heart Research Centre for failing to detect
theft of more than AUS$450 000 (£188.517) by an employee.

The firm agreed to audit the Centre’s books in 1997.

The centre claims that the firm failed to detect and report the theft, or
failed to report their awareness of the theft in the course of the audit,
The
Age reported.

The centre is claiming damages under Australia’s Trade Practices Act, saying
the firm misled or deceived it in giving assurance that no irregularities were
detected and had not occurred during the audit period.

In a separate case, a tool-making company, DMG Industries is taking KPMG to
court alleging the firm did not advise it properly.

DMG contracted the firm to prepare its research and development tax
concession claims for research and development spending.

The company says KPMG’s improper advice meant it lost out on higher benefits
which amounting to AUS$4m (£1.675m).

Further reading:

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Plea agreement likely in KPMG tax shelter
case

EU to consult on auditor liability cap