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UPDATE 1-PwC to pay $7.9 million to settle U.S. SEC charges over independence, conduct

(Adds details, context)

By Katanga Johnson

Sept 23 (Reuters) - PricewaterhouseCoopers LLP agreed to pay more than $7.9 million to settle U.S. Securities and Exchange Commission charges it violated auditor independence rules and engaged in improper professional conduct, the regulator said on Monday.

The SEC said PwC's payout includes a $3.5 million civil fine, plus more than $4.4 million of disgorgement and interest.

The regulator alleges that the auditing firm engaged in non-audit activities during an audit related to the design and implementation of a client's financial reporting systems. In addition, the SEC said the firm did not disclose its extended role to the Public Company Accounting Oversight Board (PCAOB).

The SEC oversees the PCAOB, an auditor oversight body tasked to help keep publicly traded companies in check. It also has the authority to inspect and fine auditors.

Monday's order comes as the SEC seeks to stamp out abuses by firms of auditor-independence rules. The SEC said PwC's violations occurred due to breakdowns in the auditor's quality controls, as the firm failed to review and monitor non-audit services to make sure they were permitted.

PwC did not admit or deny wrongdoing, but agreed to evaluate its non-audit services and conduct a review of its current quality controls as compliant with rules around auditor independence.

"Auditors play a fundamental role in protecting the reliability and integrity of financial reporting and must ensure that non-audit services do not come at the cost of their independence on audits of public companies,” said Anita Bandy, an official in the SEC’s Division of Enforcement. (Reporting by Jonathan Stempel in New York and Katanga Johnson in Washington Editing by Chizu Nomiyama and Tom Brown)

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