PricewaterhouseCoopers accused of ‘false’ auditing for Yukos

The Russian tax authority has accused PricewaterhouseCoopers of providing “false audits” to the former oil giant Yukos. I’m sure we’ll find out sooner or later whether these accusations have any merit, but for the time being any government institution in Russia is most definitely not getting the benefit of my doubt.

Putin and his regime are so corrupt it would really surprise me if PwC was actually responsible for any wrongdoing. The downfall of Yukos was suspect in the first place, and right now the former CEO is rotting in Siberia for tax evasion. This is just more of the same. I suppose Khodorkovsky should just be happy he wasn’t poisoned like Yuschenko and that spy who died a few weeks ago.

The accountancy group says that it produced, in line with audit standards, two reports – one for stockholders and also recommendations for management – on the results of one audit. However, it insisted that this was in line with regular practice. It said that it would “vigorously defend” its position in court.

To me that sounds like they provided the audit report and a management letter. The management letter is what we give all our audit and review clients at the end that basically highlights anything they should know about our findings, for instance possible control weaknesses, and other management advice, that wouldn’t go into an audit report.

Audit reports are quite static documents in general. They all look the same and say the same thing, and that’s the way it has to be to maintain some quality control over the profession. But if you want to provide some useful information to the client, you have to do it elsewhere. This seems to be what was done.

In a way it’s nice to know some things never change, but in another more accurate way, I wish Russians could enjoy a sustained competent democratic government.