Bankers, regulators, ratings agencies, politicians, shareholders and even Chinese savers have been blamed for the financial crisis, but the accountants who signed off the books of financial institutions for all those years have remained largely unscathed.
That could be about to change after it was revealed last week that PricewaterhouseCoopers (PwC), the world's biggest accountancy firm, faces a $2bn (£1.2bn) lawsuit linked to Bernard Madoff's record $65bn investment fraud.
PwC was not Madoff's auditor. That job famously went to a three-person outfit without the ability or inclination to ask the necessary questions of its powerful client. The case against PwC's Canadian arm, brought by investors who lost their savings via the Madoff "feeder fund" Fairfield Sentry, is that the firm was negligent in failing to spot that Fairfield Sentry's $7.2bn of assets invested with Madoff did not exist.
The firm, it is claimed, should have spotted the "red flag" that Madoff not only executed the fund's investment strategy, but was the custodian of the money. PwC Canada stresses that it was not Madoff's auditor, adding that its auditing of the fund's financial statements "fully complied with professional standards". The case against PwC follows a lawsuit filed against KPMG claiming that the big four firm should have spotted Madoff's scam when auditing the main fund of US fund manager Tremont, which lost $213m on Madoff.
Read the full story here on the Telegraph website.