Tyco International Ltd. will ask its shareholders to approve a change of auditors at its March 25 annual meeting, replacing long-time auditors PricewaterhouseCoopers with Deloitte & Touche LLP.
Pending the board’s approval, PricewaterhouseCoopers’s resignation would become effective as of the filing of Tyco’s financial statement for the quarter ended Dec. 31, 2003, the Wall Street Journal reported.
With $36 billion in revenue and 270,000 employees, the Bermuda-based Tyco, which makes electronics and medical supplies and owns the ADT home-security business, announced the change during the federal trial of two Tyco executives. Chief Executive L. Dennis Kozlowski and Chief Financial Officer Mark Swartz are on trial in New York, accused of stealing $600 million from the company.
Defense attorneys for Kozlowski and Swartz have stated that all the money the two earned was approved by appropriate authorities and endorsed by PricewaterhouseCoopers, the company’s auditors since 1994. PwC has denied any negligence or involvement in fraud in its work with Tyco.
"It's important to point out we were satisfied that PwC had taken the appropriate action by replacing the lead auditor and putting a new high-quality team on the Tyco account," Tyco spokeswoman Gwen Fisher said. However, she added, "As the board and audit committee reviewed a number governance matters, they determined that changing auditors was consistent with good governance standards."
PwC was investigated by the Manhattan District Attorney’s office for its work with Tyco spanning from 1998 to 2001, but no criminal charges were filed. The Securities and Exchange Commission settled with PwC partner Richard Scalzo, who neither admitted nor denied wrongdoing in agreeing to the settlement, which didn't include any fines, the Wall Street Journal reported.