Mattel Probe Refreshes Questions About PwC Auditor Independence

Mattel Inc.'s criticism of PwC LLP while electing to retain its outside auditor adds to questions about the accounting giant’s ability to remain independent of its audit clients.

The toymaker’s audit committee found that PwC’s lead audit partner violated conflict of interest rules and provided bad advice on how to handle an income tax expense error. And now—roughly a month after settling a $7.9 million auditor independence case with the Securities and Exchange Commission—the firm is facing another independence-related probe, this time from the Public Company Accounting Oversight Board.

The firm said it responded swiftly after receiving a whistleblower complaint ...