{"id":76632,"date":"2017-07-22T14:28:44","date_gmt":"2017-07-22T14:28:44","guid":{"rendered":"http:\/\/uacrisis.org\/?p=58827"},"modified":"2017-07-22T14:29:43","modified_gmt":"2017-07-22T11:29:43","slug":"58827-national-bank-ukraine-withdraws-pwc-license","status":"publish","type":"post","link":"https:\/\/uacrisis.org\/en\/58827-national-bank-ukraine-withdraws-pwc-license","title":{"rendered":"National Bank of Ukraine withdraws PwC\u2019s license for bank audit"},"content":{"rendered":"

Ukraine Crisis Media Center publishes the translation of an article by <\/em>Economichna Pravda<\/a><\/em> regarding one of the most expensive purchases by the Ukrainian government, namely Ukraine\u2019s biggest commercial bank \u2013 Privatbank, purchased upon the audit conducted by PwC.<\/em><\/p>\n

National Bank of Ukraine removed the PricewaterhouseCoopers Audit LLC (the Ukrainian subsidiary of PwC \u2013 Economichna Pravda) from the registry of the companies authorized to audit banks.<\/p>\n

Respective decision was adopted on July 20 by the National Bank board upon the recommendation of the Committee for the audit of Ukrainian banks, reports<\/a> the NBU.<\/p>\n

The rationale behind this decision was PricewaterhouseCoopers Audit LLC\u2019s report verifying the misrepresented information on financial and commercial activities of Privatbank. In particular, this concerns the information on credit exposure and regulatory capital.<\/p>\n

\u201cThe audit findings by PricewaterhouseCoopers Audit LLC failed to highlight risks faced by Privatbank, which led to the bank being declared insolvent and nationalized, with substantial recapitalization costs borne by the state,\u201d reports the National Bank.<\/p>\n

How it happened<\/strong><\/p>\n

Already back in 2017, the National Bank of Ukraine stated<\/a> that PricewaterhouseCoopers estimated the securities in Privatbank being several times higher than their actual cost.<\/p>\n

The director of the risk assessment department at the National Bank of Ukraine Ihor Budnyk said that PwC were providing assessment and audit services at the same time. According to him, it represents a conflict of interests.<\/p>\n

\u201cAccording to the international standards, they cannot combine these two activities for one client, as while the audit is being made re-assessment of the assets is conducted. They need to engage an independent assessor,\u201d said the head of the risk management department at Ukraine\u2019s National Bank Tetyana Sirosh.<\/p>\n

According to her, almost all the company\u2019s reports had serious inconsistencies.<\/p>\n

\u201cFor example, PwC was assessing a plant producing alcoholic beverages. The report says that the subject of the assessment was immovable property and equipment owned by one legal entity. When we double checked, it turned out that the legal entity in question owns just immovable property while equipment is owned by another company. Liquidity of the immovable property alone without equipment is low, its cost is five-six times lower than the cost of the entire group of the property,\u201d Budnyk said.<\/p>\n

Sirosh adds that the National Bank also finds the general assessment approach questionable: \u201cThe subject of the assessment was the actual business, the income generated by production, however, an immovable property doesn\u2019t work without equipment.\u201d<\/p>\n

\u201cWe inquired the company\u2019s director and the assessor about the assessment they made. They told us they did not think it was necessary to conduct an assessment that deep on this object,\u201d she said.<\/p>\n

On December 21 Privatbank was officially transferred to the state property<\/a>. Later the Ministry of Finance and the National Bank discovered the need for Privatbank\u2019s additional capitalization for UAH 148 billion (almost six billion US dollars).<\/p>\n

\n\t\n\t\t\"\"\t\t\n\t\t\tView Gallery<\/span>\n\t\t\t\n\t\t\t\t1 image\t\t\t<\/span>\n\t\t<\/span>\n\t<\/a>\n<\/figure>\n\n","protected":false},"excerpt":{"rendered":"

Ukraine Crisis Media Center publishes the translation of an article by Economichna Pravda regarding one of the most expensive purchases by the Ukrainian government, namely Ukraine\u2019s biggest commercial bank \u2013 Privatbank, purchased upon the audit conducted by PwC. National Bank of Ukraine removed the PricewaterhouseCoopers Audit LLC (the Ukrainian subsidiary of PwC \u2013 Economichna Pravda) […] More<\/a><\/p>\n","protected":false},"author":20,"featured_media":76633,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[705,748],"tags":[],"section":[743],"form":[],"yoast_head":"\nNational Bank of Ukraine withdraws PwC\u2019s license for bank audit | UACRISIS.ORG<\/title>\n<meta name=\"description\" content=\"Ukraine Crisis Media Center publishes the translation of an article by Economichna Pravda regarding one of the most expensive purchases by the Ukrainian | Uacrisis.org\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/uacrisis.org\/en\/58827-national-bank-ukraine-withdraws-pwc-license\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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