Audit firm ordered to pay 105M DKK in damages

PricewaterhouseCoopers (PwC) has been ordered to pay compensation of nearly 105 million Danish kroner for endorsing a financial statement that contradicted good accounting practice, ruled by the Lyngby Court. The case centered around the acquisition of the insurance company Qudos by New Nordic in 2016. New Nordic accused PwC of a lack of professionalism and care in auditing, failing to identify significant errors in Qudos’ 2016 accounts. The reported equity of 167 million kroner was incorrect, with actual equity being no more than 5 million kroner. PwC’s failure to reveal the poor financial state of Qudos meant that New Nordic had to inject approximately 300 million kroner immediately to prevent bankruptcy. The compensation covers both the original purchase sum and the required capital injection. PwC must also pay interest and nearly 11.5 million kroner in legal costs, with the total payment required within 14 days.