Accounting giant, PriceWaterhouseCoopers (PWC) has been ordered to pay $625 million in damages, by an Alabama judge, in the United States of America for their negligence that led to one of the largest bank collapses in the US.
The award that is among the biggest for accounting malpractices, is in respect to the 2009 collapse of the Colonial Bank, an Alabama-based bank and was brought by the Federal Deposit Insurance Corporation (FDIC), a US government agency that insures consumer bank deposits against losses.
FIDIC said it lost about $2.8 billion from the collapse of Colonial, one of the 25 biggest banks in America then with $26 billion in assets and 340 branches.
The ruling sets interesting benchmarks for Uganda where over 5 banks in the recent past, we closed by Bank of Uganda but the auditors have walked away scot-free and in some cases have been awarded lucrative deals to either wind up the banks and or carry out forensic audits.
Despite the sensitive role of the audit firms and a regulatory requirements for most businesses especially financial services firms and listed companies, the role of the regulating these accounting firms is not clear.
The award, yet another slap in the face of the Big 4 accounting firms, comes on the heels of another record fine of £6.5 million by the British accountancy regulator over deficiencies in its audits of BHS, another lender in the UK before the retailer collapsed.
According to Judge Rothstein, Colonial Bank’s failure was accelerated by a “massive fraud