Accounting Giant Settles SEC Charges

PricewaterhouseCoopers, the world’s largest accounting firm, settled charges that its executives and pension fund compromised the firm’s independence by buying stock in more than 70 companies it was auditing. The Securities and Exchange Commission, which filed the charges, said the New York-based company agreed to pay $2.5 million to set up an education fund to promote industrywide awareness of an auditor’s obligation to avoid conflicts of interest. PricewaterhouseCoopers, which did not admit or deny wrongdoing, also agreed to a censure and to improve its internal procedures for monitoring adherence to auditor independence rules. “We abhor and regret these deviations from firm standards,” said David Nestor, a spokesman for the firm. “The firm accepts responsibility for these incidents.” The SEC said it found more than 70 instances from 1996 through 1998 in which the company’s partners, managers and pension fund purchased securities of its clients. Nestor said the firm’s audits of the 70-plus companies were not compromised by the executives’ investments because those executives didn’t participate in the audits. Executives conducting the audits also weren’t aware of their colleagues’ investments, he said.