Big Four on Wikileaks: No Surprises for PwС and KPMG
Recently released Wikileaks cables contain information about two key players in the accounting industry – PwC and KPMG. However, as many other facts disclosed by WikiLeaks – this information is already known to the public, even if not confirmed or denied officially.
Wikileaks published cable referenced 09MOSCOW3144, created December 30, 2009, classified as confidential and originating from U.S. Embassy in Moscow, on alleged pressure that the Russian government has exerted on PwC to disavow its “clean opinion” audits in the Yukos Oil, aided by the reported raids on PwC office in Russia and threats to recall Russian audit license of PwC, closing this market for the Firm.
PwC continuously signed off Yukos’s financial statements from 1994 to 2003, and disavowed all opinions in June 2007.
The firm said the withdrawal of its initial audits of Yukos had nothing to do with any coercion from the Russian government and is made due to discovery of new facts, which required them to withdraw their audit opinions.
Wikileaks also published (09LONDON2598, for official use only, originating from U.S. Embassy in London, created November 11, 2009) KPMG’s sceptical reaction on the Queen’s opening speech in Parliament on November 18, 2009, where Her Majesty sets out one of the priorities for new legislative session – to develop a new Financial Services Bill, requiring form systemically important banks to establish plans for recovery and resolution, that ensure banks’ financial continuity, later called by journalists “living wills”. Banks cautioned, that legislation would create advantages for other financial centers outside UK.
KPMG statement was much more diplomatic and, according to WikiLeaks, “idea of a living will, while attractive as a concept, would not be easy in practice since bank structures have developed over 20-30 years and are extremely complex”.
KPMG comment, disclosed by WikiLeaks, correlates with “official” position of the firm, published on it website earlier, on November 4, 2009, where KPMG highlights specific potential problems of the Act.