The National Bank of Ukraine removes PwC as auditor

Here’s why

The National Bank of Ukraine has removed PricewaterhouseCoopers Audit LLC from the Register of accounting firms authorised to audit banks. The decision to this effect was taken by the NBU Board on 20 July 2017 upon the recommendation from the Committee on the Audit of Ukrainian Banks.

The rationale behind this decision was PricewaterhouseCoopers Audit LLC’s verification of misrepresented financial information in the financial statements of CB PRIVATBANK PJSC. In particular, this concerns information on credit exposure and regulatory capital reported by the bank.

The audit report issued by PricewaterhouseCoopers Audit LLC failed to highlight the credit risk exposure faced by PRIVATBANK PJSC, which led to the bank being declared insolvent and nationalized, with substantial recapitalization costs borne by the state.

The NBU is authorized to remove accounting firms from the Register of banks’ auditors in accordance with Article 7 of the Law of Ukraine On the National Bank of Ukraine, Article 70 of the Law of Ukraine On Banks and Banking and NBU regulations. The regulator’s practice of barring accounting firms from auditing banks is in line with international approaches and is in compliance with the 27th principle of the Basel Core Principles of Banking Supervision.

In 2015-2016, the NBU barred nine accounting firms from auditing banks for audit policy violations.