New York prosecutors are reportedly probing PricewaterhouseCoopers LLP over its role as Tyco
outside auditor, focusing on whether it knew about secret bonuses paid to former executives and about the accounting practices that regulators say were used to conceal the payments.
A PwC spokesman acknowledged the accounting firm is being questioned over the Tyco affair, but said "we have no reason to believe we will be anything but a provider of information" for prosecutors, according to the Wall Street Journal. However, prosecutors level of interest suggested they may attempt to make a criminal case against the accounting firm, according to the Wall Street Journal.
For chief executive Dennis Kozlowski and former chief financial officer Mark Swartz have been charged with stealing $170 million and illegally netting another $430 million in stock sales. Some experts say the accounting for the bonuses appears to be so wrong that a thorough audit should have caught it.
PwC has been Tyco's accounting firm since 1994. Tyco has hired a separate forensic-accounting firm to conduct a fresh review of its accounting practices since 1999.