Some big news was released in the final days of 2017 regarding PwC’s role in the Colonial Bank audit. If you pay attention to our website or our podcast, you know that PwC has faced a lot of liability with regard to the Colonial bank audit which was tied up with PwC’s audit of taylor bean where they faced billions of dollars in liability.

PwC’s name was dragged through the mud in that case as it seemed like they did limited to no work in that audit. They were initially sued by the bankruptcy trustee for colonial bank and taylor bean. After a few months of terrible litigation for PwC they were eventually able to settle for an undisclosed amount.

Now it seems that PwC faces even more liability from this Colonial Bank audit.

Background of the PwC Colonial Bank Case

The background of the case was the Colonial bank was a bank that was based out of Alabama that was audited by PwC from 2002 to 2009.

Colonial bank bought 100’s of millions of dollars of mortgages from Taylor Bean that taylor bean didn’t own or had pledged to other lenders. There was an individual at Colonial Bank named Catherine Kissick who helped Taylor bean perpetrate the fraud.

Colonial bank also had many other failed investments and strategies other than the fraud perpetrated by this individual.

The latest liability that PwC faces comes from the FDIC who had to pay out deposit holders who lost their money from the collapse of Colonial Bank.

On the basis of case study answer the following question

Provide a brief description of the key events and the factual issues behind the case and Finally, provide recommendations and possible improvements to: the Audit Strategy, the Audit Program, Other effective measures; which would prevent the recurrence of the same litigation in the future and maintain the professional reputation of auditors.

Answer rating: 100% (QA)

Application of Good Judgment Process An important way to improve professional skepticism in individual auditors is to accelerate their ability to exer... View the full answer