PricewaterhouseCoopers has long had a reputation of trust, but now, a new report is casting doubt on just how trustworthy the prestigious global accounting firm really is. The New York Times cites unnamed sources and confidential documents that show regulators are investigating the accounting firm.

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PricewaterhouseCoopers under investigation

According to the report, PricewaterhouseCoopers is being investigated for hiding some of the misconduct it was hired to ferret out. According to the newspaper’s sources, the top financial regulator in New York may soon announce a settlement with the firm. That settlement is said to be in connection with a report PwC issued about the Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) (TYO:8306), which is one of the largest banks in the world.

Benjamin M. Lawsky is said to be preparing to announce a $25 million fine against PwC and possible bar one of its consulting divisions from taking on some assignments from banks that are regulated by New York. That’s expected to last for two years.

PwC skirting the law?

The report suggests that PricewaterhouseCoopers did not actually break the law, but rather, lacked the integrity and objectivity in the case in question. The accounting firm was said to have agreed to the two-year ban and agreed to have paid the fine. Lawsky’s office is able to do this through a law in New York State in which consultants can be censured without violating a law.

The settlement reportedly deals with PricewaterhouseCoopers ‘s work for the Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) (TYO:8306). Regulators had suspected the bank of sending money through its branches in New York for nations that the U.S. had blacklisted. The bank reportedly hired the firm to look into its transactions with Iran and other countries that were under sanction.

PwC’s first report reveals details

In PwC’s first draft of a report on those transactions, the firm reportedly acknowledged that there were some limitations placed on its investigation. The firm also explained how the bank had removed the names of clients in Iran in an attempt to not get caught by regulators. However, PricewaterhouseCoopers allegedly bowed to pressure from the bank’s representatives and deleted some of the worst criticisms while watering down others.

For example, the accounting firm allegedly changed the term “several issues” to “some issues. Instead of questioning whether there was an “intentional omission” of client names, the firm talked about “subsequent events.” The New York Times also states that some of the most important parts of the initial report were entirely removed and replaced with other summaries of what the bank did.