PwC withdraws Yukos reports

Jun 25, 2007 02:00 AM

PricewaterhouseCoopers (PwC) Russia has withdrawn its audits of bankrupt oil giant Yukos for the years 1996-2004. The decision comes as PricewaterhouseCoopers is fighting in court against tax authorities who have alleged that the auditor helped the oil firm in a massive tax-evasion scheme.
Even a scandal around the energy giant Enron in 2001 and 2002 did not prompt auditors, Arthur Andersen, to withdraw their reports.

PricewaterhouseCoopers Russia has withdrawn all audit reports of Yukos, Russian Prosecutor General Yuri Chaika said. PwC’s Russian unit said its financial reports on the company for the years 1996-2004 should no longer be relied upon.
“PwC decided to withdraw its audit opinions for Yukos when it became aware of new information which, had it been known at the time, may have affected Yukos’s audit reports,” PwC said. “PwC now believes information and representations which was provided to PwC by Yukos’s former management may not have been accurate.”

The decision comes as PricewaterhouseCoopers is fighting in court against tax authorities who have alleged that the auditor knowingly helped the oil firm in what officials say was a massive tax-evasion scheme. The auditors have withdrawn reports for the years 2002-2004 which are the matter of dispute.
PwC denies any wrongdoing and appealed after it lost the first round in the court battle. PwC also faced charges of underpaying taxes, and the firm paid $ 14 mm last year to settle those obligations.

A PwC official said the decision to withdraw the Yukos audits was not related to the case under appeal, which the auditor still wants to pursue.
At issue in that litigation is whether PwC knew of illegal activity at the time of the audits, something PwC continues to deny.

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