PracticeAuditBCCI: auditor hit with £1m in fines and costs

BCCI: auditor hit with £1m in fines and costs

Watchdog penalises Price Waterhouse for 'inappropriate' audit opinion

A fine and costs totalling nearly £1m has been imposed on Price Waterhouse
after the Joint Disciplinary Scheme found it had inappropriately given
unqualified audit opinions on BCCI.

The watchdog said it has fined the firm, which became PricewaterhouseCoopers
in 1998, £150,000 and imposed costs of £825,000 in relation to the audits of
BCCI by the firm’s Cayman Islands office in 1987, 1988 and 1989.

The report said audits for all three years were unqualified inappropriately
because they failed to properly disclose the ‘related party relationship’
between BCCI and another Cayman Islands group ICIC.

In failing to disclose the related party relationship PW was effectively in
breach of International Accounting Standard 24.

BCCI effectively controlled ICIC, even though its staff benefit fund was a
major shareholder in the bank. Sums from the ruler of Abu Dhabi deposited with
ICIC for investment, were also stolen as part of BCCI’s elaborate frauds.

The JDS said there was no question as to the honesty and integrity of PW
staff on the BCCI audit.

PwC chairman Keiran Poynter said: ‘Throughout this matter we have
consistently said that Price Waterhouse was deceived, as indeed criminal
convictions have proved.’

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