ACC418 Auditing
Article Summary 2 Judge Hits PwC With Big Payout
PricewaterhouseCoopers LLP, which is one of the Big Four auditors company, was
ordered to pay $625.3 million in damages for failing to catch a fraud scheme that helped to cause
one of the biggest bank failures of the financial crisis by U.S. District Judge Barbara Jacobs
Rothstein. The judge found PwC, the outside auditor for Colonial’s bank, was negligent in not
detecting a massive fraud at a major customer of the firm, and the scheme lead to bank’s
collapse. The fraud happened at Taylor Bean &Whitaker Mortgage Corp., When its own cash
was shortfalls Taylor Bean covered that up by selling Colonial thousands of mortgages it had
already sold to other investors. At the time, PwC’s audits of Colonial found no problems about it.
After the fraud was found, the Federal Deposit Insurance Corp was tilted to $625 million in
