PwC in the US will go to trial next Monday, in which it will have to defend its audits of two tech companies and that it rightly fired a whistleblower.
Former PwC senior manager Mauro Botta has accused audit giant of firing him because he submitted complaints to the Securities and Exchange Commission (SEC) and other accounting and audit regulators, saying the firm had too cosy a relationship with its clients and so allowed weak internal controls to slide, Bloomberg Tax first reported.
PwC US called the allegations false, and said it stands behind its audits of Cavium and Harmonic, which it has been working with for more than six years.
According to Bloomberg Tax, in court filings PwC US claimed that Botta signed off on the audits despite his concerns.
The giant also said Botta “fabricated an internal control and falsified audit documentation,” and then lied about doing so during an internal investigation. As a result, PwC said, he was fired.
Botta’s lawyers said that the case is about the inherent conflict between auditors role serving the interests of investors and the need to retain paying clients.
The whistleblower’s lawyers alledged the firm moved Botta off assignments when his “honest questions jeopardised a profitable relationship.”
They said Botta submitted his complaint to the SEC in 2016 because he believed there was a violation of SEC rules or regulations, giving him protection as a whistleblower under the Sarbanes-Oxley Act.
But according to PwC filings, the SEC investigated Botta’s claims and closed its inquiry without bringing any enforcement cases.