Pembroke, Bermuda (Jan. 26, 2004) -- Tyco International’s audit committee and board of directors want the company’s shareholders to approve dropping PricewaterhouseCoopers as its independent auditor and hiring rival Deloitte & Touche instead.
The audit committee, which said its recommendation followed a review of qualified audit firms, said that PwC agreed to submit its resignation, which will become effective when Tyco files its 10-Q for the quarter ended Dec. 31, 2003. Deloitte will serve as the company’s independent auditor from that date until the company’s annual general meeting on March 25, when shareholders will vote on the change.
The Wall Street Journal quoted a Tyco spokeswoman as saying the firm was “satisfied that PwC had taken the appropriate action by replacing the lead auditor and putting a new high-quality team on the Tyco account,” but added that the board and audit committee determined that changing auditors “was consistent with good governance standards.”
The move comes as Tyco ex-chief L. Dennis Kozlowski and former chief financial officer Mark Swartz are on trial in Manhattan Supreme Court for allegedly looting the company of $600 million.
PwC has denied that it was negligent in its audit of Tyco or complicit in any alleged fraud. Back in August, the Securities and Exchange Commission permanently barred former PwC partner and Tyco auditor Richard P. Scalzo from practice. The commission said Scalzo “recklessly” violated antifraud provisions of the federal securities laws and engaged in “improper professional conduct.”
Tyco said it intends -- with the approval of its audit committee -- to retain PwC to provide certain non-audit services.
-- WebCPA staff
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