PwC and KPMG Together Again – Collins & Aikman Sues Both

In a replay of the troubles KPMG and PwC have at Shell, Collins & Aikman, troubled automotive supplier is suing their former CEO and their auditors. Let’s hope PwC and KPMG have enough money between the two of them to cover this one, too.

Arthur Andersen was the Collins & Aikman auditor in 2000 and prior.
PWC inherited this turkey from Arthur Andersen in 2001 and also audited 2002.
KPMG took over in 2003.

Who was it that said auditor switches, especially more than one at a legacy Arthur Andersen client should be a big red flag?

Collins & Aikman sues ex-CEO Stockman and former auditors KPMG and PwC
Collins & Aikman Corp. sued its former chief executive, David Stockman, and the private-equity firm that helped him take control of the auto-parts company in 2001, saying they enriched themselves by inflating earnings and sending the company on a disastrous acquisition spree.

The lawsuit, filed Wednesday in the U.S. District Court in Wilmington, Del., accuses Stockman and several other former executives and directors of fraud and mismanagement.

It alleges malpractice by Collins & Aikman’s auditors, PricewaterhouseCoopers and KPMG, saying they turned a “blind eye” to signs of accounting improprieties at the company.