Perth-based Pioneer Credit claims it lost more than $30 million because of PwC’s breach of duty and misleading conduct, in a court action against the accounting firm.
Perth-based Pioneer Credit claims it lost more than $30 million because of PwC’s breach of duty and misleading conduct, in a court action against the accounting firm.
Pioneer Credit today announced on the ASX it has lodged a writ in the Supreme Court of Western Australia, naming PricewaterhouseCoopers, or PwC, as the defendant.
In its ASX statement, Pioneer Credit alleged it suffered loss and damage worth about $27 million, or almost $32 million with interest.
The St Georges Terrace-based financial services firm claimed PwC was engaged to ensure Pioneer Credit could correctly adopt Accounting Standard AASB 9 for the reporting period starting July 1, 2018.
However, PwC allegedly gave wrong advice and caused Pioneer Credit to breach its financial covenants.
Pioneer Credit claimed PwC failed to exercise reasonable skill and care by giving incorrect opinion as an auditor, according to the Supreme Court writ.
The writ also said PwC engaged in misleading and deceptive conduct from December 11 2017 to at least February 2019.
Pioneer Credit chairman Stephen Targett said the company’s adoption of the accounting standards was a critical time for the business.
“Pioneer sought PwC’s opinion well in advance of adopting AASB 9, to ensure that Pioneer’s understanding and intended adoption was correct, and to provide it with sufficient time to prepare for any critical changes which might arise as a result of the new standard,” he said in a statement.
“The proceeding in essence alleges that PwC has failed the company and its shareholders.
“Pioneer claims PwC’s conduct has instead had a significant cost impact on the company, both to its bottom line and reputationally. Naturally shareholders should expect that the board would seek to recover the losses sustained.
“We have now commenced that process and will continue to keep shareholders updated as the matter progresses.”
Mr Targett said Pioneer engaged PwC in 2013, before an initial public offering, to ensure the company received independent audit services from a top tier firm.
PwC has had ample time in the spotlight recently, amid a tax leaks scandal of confidential government information.
In May, the Australian Treasury referred the matter to the Australian Federal Police to consider a criminal investigation.
