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February 5, 2023

PwC Italy Partner Is Probably In a Lot of Trouble, You Guys

So, there was this accounting scandal in early 2017 at the Italian unit of British phone company BT, in which nearly two dozen people at BT Global Services, including its CEO, CFO, and head of Europe, knew about inflated revenues, bogus contract renewals and invoices, and made-up supplier transactions to “meet bonus targets and disguise the unit’s true financial performance,” according to Reuters.

The fraud led to a 513 million-pound ($661 million) writedown at BT Global Services, which is now shedding assets and cutting thousands of jobs, Bloomberg reported.

A preliminary criminal investigation is underway and prosecutors could press charges against the three executives. But under Italian law, those under investigation have three weeks to prove why they shouldn’t be charged, according to Reuters.

Whenever news of an accounting scandal at a company breaks, one of the first questions that is asked is usually, “Who was the auditor?” In this case, it was PwC, and the lead auditor of BT’s Italian unit could be in a lot of hot water, or acqua calda.

From Reuters:

The document [prepared by Italian prosecutors] also reveals that an Italian partner of BT’s auditor, PricewaterhouseCoopers, is under investigation over the scandal.

In the document prosecutors allege Andrea Alessandri, who led the PwC team in charge of auditing BT Italia’s accounts, falsified the audit.

Reuters could not immediately contact Alessandri for comment. A PwC spokeswoman said the company had no immediate comment.

As you would expect, P. Dubs is no longer the auditor of BT. This mess honor now belongs to KPMG, according to Economia.

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