Explain how the British "true and fair" audit approach or strategy differs from the audit philosophy applied in the United States. In your opinion, which of the two audit approaches is better or, at least, more defensible?

Despite earlier reports that Gazprom would likely retain a new audit firm, in May 2002 the company issued a press release indicating that PwC would remain its independent auditor. Of 29 accounting firms that had submitted bids for the Gazprom engagement, the company's board reported that PwC was the firm that best met its "requirements."

Throughout the late spring and summer of 2002, PwC received more good news as one by one the Russian courts dismissed the lawsuits filed against the company by Hermitage Capital. The Russian courts ruled that under existing Russian law only the audited entity could sue its accounting firm for defective audits. Since the majority of Gazprom's board of directors and stockholders refused to side with the plaintiffs in the lawsuits, the courts' only alternative was to rule that the lawsuits were invalid. The Ministry of Finance also denied Hermitage's request that PwC's license to practice be rescinded.

William Browder reacted angrily to the dismissal of the lawsuits his firm had filed against PwC and the news that the accounting firm would remain Gazprom's auditor. Browder argued that, at a minimum, PwC and Gazprom officials should provide more detailed disclosures regarding the company's key operating results. For example, Browder suggested that in the future the company report in its income statements, "Profit after Stealing and Subsidies" and "Profit If Stealing and Subsidies Are Eliminated."