A stunning legal upset against PwC on December 28, 2017, provides a rare glimpse into the kinds of audit failures that regulators have been harping on for years, although its ultimate weight on the burden of auditors to find fraud is not yet clear.
PwC lost a critical legal argument in its defense against liability in the massive fraud and failure at Colonial Bancgroup in 2009 at the peak of the financial crisis. While the firm is expected to appeal—and some legal analysts believe they will win—the case rips the bandage from the long-festering wound over what duty auditors have to find fraud.
