Some pretty great things were said during the $5.5 billion PwC trial involving Taylor Bean. The Taylor Bean case has been settled recently, but we wanted to take a few moments to reflect on some of the harsh accusations said during the trial.

On one side you had PwC that was constantly banging the drum the drum that auditors have no responsibility to detect fraud especially when collusion is involved. On the other hand, you had the plaintiff’s team and witnesses stating that PwC failed to conduct an proper audit. With all that being said, we wanted to highlight ten great quotes from the trial below. 

Quote 1

“Year after year, Pricewaterhouse didn’t do their job, they didn’t follow the rules and they failed to detect fraud”

— Steven Thomas

This quote is a huge accusation by the plaintiff’s lawyer accusing PwC of not doing their jobs. It was his position the whole trial. His view was that PwC did not do their job, therefore, the fraud continued and investors were defrauded.

Quote 2

“Remember, Taylor Bean’s owner and half of its board of directors were criminals. They didn’t rely on Pricewaterhouse’s audit report because they knew about the fraud they were committing.”

— Beth Tanis

This was PwC’s defense attorney claiming that PwC did not have responsibility because Taylor Bean was run by criminals that colluded together. 

Quote 3

“PricewaterhouseCoopers failed to do its job because they relied on unsigned contracts and just needed one phone call”

— Steven Thomas

This was another accusation used by the plaintiff’s team very often. Mr. Thomas argued that PwC had responsibility in the matter because they didn’t even perform basic procedures that could have prevented the whole thing. 




Quote 4

“Colonial Bancgroup every year hired PwC to audit its financial statements. Colonial Bangroup did not hire PwC to conduct a fraud audit”

— Beth Tanis

This quote is from Beth Tanis showing her argument that PwC was not engaged every year to detect whether management was perpetrating fraud against the company and investors.

Quote 5

“But for the audited statements by Pricewaterhousecoopers, they couldn’t have continued their fraud for as long as they did”

— Jeffrey Cavender – former member of Taylor Bean’s board

Again this is the plaintiff’s side that they believe PwC should have been able to detect management’s fraud if they just performed some basic procedures. 

Quote 6

“Absolutely. We have a responsibility to perform procedures that are detecting fraud just like we have responsibilities to perform procedures to detect errors in financial statements.”

— Dennis Nally PwC Chairman

This was a quote from Dennis Nally that the plaintiff tried to have admitted as part of the case because it shows that PwC’s leadership does believe they have a responsibility to detect fraud. 

Quote 7

“I think he failed in his responsibility by a violation of auditing standards”

— Dan Guy

This quote was from the deposition of Dan Guy who was an expert witness in the case. His quote was about Gary Westbrook, the PwC lead audit partner. Saying that a partner violated auditing standards is a huge accusation to make. 

Quote 8

“I wouldn’t describe my responsibilities as an auditor as a public watchdog”

— Gary Westbrook

Gary Westbrook was quoted as saying that he didn’t believe it was his responsibility to be a public watchdog. The context in which he said it in was up for debate during the trial. Do you think it is an auditor’s duty to be a public watchdog?

“In 2004 their work on AOT is woefully inadequate, and it was done by a rookie, Ms. Odum. The confirmation in 2004 was —appears to be extensively relied on, and there’s no roll forward of the confirmation.”

— Dan Guy

This was another great line from Dan Guy from his deposition. This is one of his famous lines accusing PwC of using underpaid rookies to audit complex accounts. Here he accuses them of not only using rookies but relying on their work extensively.

“They had nil understanding of the transaction. They did no control work…You can’t audit what you don’t understand. You can’t even confirm what you don’t understand because the confirmation literature is crystal clear that before you confirm you understand. ”

— Dan Guy

Another great accusation from Dan Guy. Here he accuses PwC of not being able to audit this client simply because they never took the time to understand what was going on. 

Cast of Characters

Let’s go over the people that said the quotes above. 

Steven Thomas

Lawyer from Thomas Alexander & Forest that represented the plaintiff in this case. He represented Neil Luria who was the Taylor Bean Trustee. 

Beth Tanis

Beth is a partner at King & Spalding. She has great experience representing public accounting firms according to her bio. 

Dan Guy

Dan Guy was an AICPA vice president for 20 years. He is a litigation consultant and was an expert witness for the plaintiff. He received the John J. McCloy award for contributing to audit quality. 

Gary Westbrook Partner at PwC

Gary Westbrook was formerly the PwC lead audit partner involved with Colonial Bancorp.