Heads Roll at Consulting Giant in Wake of SEC Investigation
Steve McVey - January 17, 2000

Event Summary

In a document filed on January 6, the Securities and Exchange Commission reported that global audit and consulting firm PricewaterhouseCoopers LLP violated auditor independence rules and engaged in improper professional conduct. Independence rules prohibit tax and audit firms from making direct investments in companies they audit. The findings were made by Jess Fardella, an independent consultant appointed by the SEC in March 1999, who supervised an internal review by PwC. PwC agreed to conduct the review after it was censured by the SEC in January 1999 for similar violations. According to the 122-page report, PwC partners were the primary offenders of the independence rules, though other employees also contributed to the problem. PwC acknowledged the SEC findings reveal 'widespread independence non-compliance that reflected serious structural and cultural problems in the firm.'..