PracticeAccounting FirmsPwC denies negligence in $2.5bn lawsuit

PwC denies negligence in $2.5bn lawsuit

PricewaterhouseCoopers has denied claims of misconduct as it faces a huge $2.5bn (£1.6bn) lawsuit by Amerco, the US owner of truck rental group U-Haul.

Link: PwC awaits business incubator complaint decision

The company filed a lawsuit against the Big Four firm alleging PwC’s conduct was ‘negligent, fraudulent and tortuous during the last seven years of its audit engagement.’

It said PwC had advised it to restructure its accounts and acquire $865.8m (£554.3m) in new finance. The firm then allegedly arranged the credit facility to stop Amerco from going bankrupt, but this forced a cash crisis that forced the company to default on a bond payment.

Amerco said it then went back to PwC, seeking advice on how to account for its relationship with a holding company only to be told the advice it had been given was wrong.

But PwC denied responsibility for the fiasco. It said: ‘The primary responsibility for the accuracy of financial statements lies with the company.’

It added that once it became apparent that there was an error in Amerco’s accounts it worked with them to correct the financial statements.

‘This action appears to be an attempt by company management to shift the blame away from themselves. We’re confident it will fail,’ concluded PwC.

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