Washington (May 27, 2003) -- PricewaterhouseCoopers agreed to pay $1 million to settle Securities and Exchange Commission charges of improper professional conduct in connection with PwC’s audit of SmarTalk TeleServices Inc.'s 1997 financial statements.

The firm didn’t admit or deny any wrongdoing. The SEC censured PwC for engaging in "improper professional conduct" for failure to adequately audit a $25 million restructuring reserve established in 1997 by SmarTalk, a now-bankrupt provider of pre-paid telephone cards and wireless services. The SEC said PwC also failed to adequately audit amounts charged against the restructuring reserve at year-end 1997. As part of the settlement, PwC also agreed to establish and maintain policies and procedures to preserve working papers intact and to retain an independent consultant to review its software system.

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