Birmingham, Ala. (May 9, 2003) -- Embattled rehabilitative care provider HealthSouth Corp. named Big Four firm PricewaterhouseCoopers as its auditor, replacing Ernst & Young, which was fired last month amidst a massive $2.5 billion accounting scandal.
The company based here is currently under investigation by both the Securities and Exchange Commission and the Justice Department for the fraud, allegedly spearheaded by the company’s former chief executive Richard Scrushy. Thus far, 10 former Health South employees have agreed to plea bargains with the DOJ including five of the company’s former chief financial officers.
Meanwhile, Ernst & Young has denied any knowledge of the accounting irregularities and has indicated that it is cooperating with the investigation.
“What I find interesting is that PwC is the audit firm that’s coming in behind (E&Y),” said accounting industry consultant Steve Erickson. “PwC has broken ranks with some of the other national firms and put increased emphasis on the responsibility of auditors to find fraud. It looks like HealthSouth is trying to convince people that they’re doing something different and improving the overall accountability of the organization.”
-- Bill Carlino
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