| Other Photos |
 |
|
 |
Court Blasts PricewaterhouseCoopers
The full text of the decision of the Moscow Arbitration Court on the illegality of the audit of YUKOS by PricewaterhouseCoopers has proven to be unexpectedly sharply worded. The court called the auditor “practically a participant in implementing illegal tax schemes” and accused the company of violating professional standards. The court's decision could be grounds to refuse to extend the company's auditing license, which expires May 20.
The court sided fully with Moscow Tax Inspectorate No. 5, which had filed a suit against ZAO PricewaterhouseCoopers Audit when it invalidated its contracts with YUKOS for auditing for 2002, 2003 and 2004 under article 169 of the Civil Code of the Russian federation and assigned the $480,000 the company received for those audits to the federal budget. The purpose of those deals was not to conduct audits, the court wrote, but to deceive YUKOS stockholders with audit statements “containing knowingly unreliable information.” The court wrote that PwC knew about the oil company's tax evasion and did not inform the shareholders.
The courts conclusion that the auditor violated industry ethical standards, especially Standard No. 9 concerning “Affiliated Parties,” will be especially unpleasant to PwC, which based its defense on arguments about standards. The company's press service stated that the audit was conducted “in full conformity with professional standards and current legislation.” It added that the company will appeal the court's decision.
The case is being watched closely. Alexey Miller, CEO of Gazprom, a PwC client, met with PwC representative Richard Patterson recently. U.S. Secretary of State Condoleezza Rice spoke with Russian Foreign Minister Sergey Lavrov about the case, U.S. Finance Secretary Henry Paulson spoke to Russian Finance Minister Alexey Kudrin (whose agency has the final decision on the relicensing of PwC) and U.S. Ambassador to Russia William Burns relayed Washington's concerns to the Russian Supreme Court of Arbitration and presidential administration.
www.kommersant.com
All the Article in Russian as of Apr. 02, 2007
|
|
|
Photo: PhotoXpress
