The administrators of Quinn Insurance, a prominent Irish insurer, have sued PwC for €1 billion, alleging negligent auditing.
Quinn Insurance, founded by former billionaire Sean Quinn, was put into administration in 2010 after failing to meet solvency requirements, prompting the Irish government to inject €1.1 billion to keep the company afloat. The administrators, Michael McAteer and Paul McCann from Grant Thornton, claim that PwC's failure to highlight deficiencies in Quinn's accounts led to significant and avoidable losses.
"The defendant failed to appreciate the significance and implications of the deficiencies and weaknesses which it did discover and did not adequately review and where appropriate interrogate the plaintiffs' (Quinn's) own assessment," McAteer said in an affidavit. The administrators plan to use any damages awarded from the lawsuit to repay Quinn's debts to the state. PwC has denied the allegations, stating that the claims are unjustified and contain factual inaccuracies.
However, this is not the first time PwC has faced allegations of poor audit quality and employee conduct. Earlier this year, the US Public Company Accounting Oversight Board publically criticized PwC for not ensuring the quality of its audits, assessing a $2.75 million fine. PwC has also faced much scrutiny in Australia, following a high-profile scandal in which a partner shared confidential information obtained through consulting engagements with the government to help clients evade taxes.
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