British American Tobacco drops and sues its auditor PwC

24th Mar 2015 14:56

Cigarette maker British American Tobacco on Tuesday announced the end of its 17 year relationship with its auditor PriceWaterhouseCoopers and has taken them to court over a potential $1bn US environmental damages bill.The British-based maker of Lucky Strike and Dunhill cigarettes has appointed KPMG as its new auditor after launching legal action against PwC.BAT is suing PwC for its audit of paper maker Windward Prospects, a company with which the tobacco group had a long-running dispute over the cost of cleaning up polluted rivers in Wisconsin, US.The latest events come after the Big Four auditing firm are still from accusations by the Public Accounts Committee that it promoted tax avoidance "on an industrial scale".Legal documents have already said the clean-up costs are estimated at $827m, with a potential natural resources damage bill of a further $382m."This situation has arisen as a result of proposed litigation by a group subsidiary against PwC. The potential claims against PwC arose from work carried out by PwC in relation to the audit of the accounts of a third party. These claims do not concern the audit of any BAT Group company," said the company.