National Bank of Ukraine Withdraws PwC Bank Audit Rights over 5.5bn hole at PrivatBank

Monday, July 24, 2017 Print Email
The National Bank of Ukraine has released a statement in which the bank announced that it has removed PwC from the list of audit firms that are permitted to audit banks in Ukraine. This decision was made in reaction to the findings that PwC failed in identifying a $5.5 billion ‘black hole’ in the balance sheet of privatBank, which is one of the largest commercial banks in Ukraine.

The Central bank said in a statement that the reason to the decision of removing PwC from the register of firms was that the audited financial statements of PrivatBank contained misrepresented financial information which PwC failed to identify in the prior audits of the said commercial bank.

The bank further said that the findings by PwC during the course of audit failed to highlight the risks PrivatBank faced and due to this the bank was declared insolvent and was nationalised last year with the state bearing substantial recapitalization costs in context of the bank being nationalised.

The decision of nationalization of privatBank was taken by the board of the National Bank of Ukraine. The decision was based on the recommendations suggested by the committee responsible for dealing issues related to audit of Ukrainian banks. In 2015-2016, the Central bank of Ukraine removed nine firms from the register of firms allowed to audit banks in Ukraine due to those firms violating audit policies and regulations.

PwC had audited PrivatBank from the mid-1990s until last year when the bank was nationalised by the government in the wake of claims of massive related party lending practices.

PwC also released a statement in which they said that they are very disappointed with the decision taken by the National Bank to remove PwC from the list of firms authorised to perform audits of Ukrainian banks with reference to the audit of privatBank. The big four firm also said that they are not satisfied with the reasons the National Bank gave as the reasons given do not justify the decision they have taken. PwC further said that they are looking at all the options to reverse the decision taken by the National Bank of Ukraine against them.

PwC remains committed to serving its clients in Ukraine across all sectors and lines of business.
Source: ReadyRatios

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