PricewaterhouseCoopers (PwC), the accountant, is facing court action over allegations in Russia that it provided false audits for Yukos, the fallen oil giant. Russian tax officials have accused the accountancy group of producing “distorted” audit reports between 2002 and 2004.

They said that PwC had compiled two audits — one for internal use by management and one for shareholders.

In a preliminary hearing, scheduled for January 10, the authorities will seek to have a contract between PwC and Yukos declared invalid. The officials want the $145,000 (£74,000) payment made by Yukos for the audit of its 2002 results, to be given to the State.

They named Doug Miller, a PwC employee, as being in charge of the Yukos audit.

PwC said yesterday that it “categorically rejects” the claims. Mike Kubena, general director of PwC Russia, said that all the firm’s audits had been conducted “according to the highest professional and ethical standards . . . strictly in compliance with Russian and international law”.

The accountancy group says that it produced, in line with audit standards, two reports - one for stockholders and also recommendations for management - on the results of one audit. However, it insisted that this was in line with regular practice. It said that it would “vigorously defend” its position in court.

PwC rejected a statement from the Russian tax service saying that it had not co-operated with tax inspectors.

The allegations over Yukos, once Russia’s largest and most profitable oil company, mark the latest in a series of high-profile disputes and legal cases for the accountancy group. This month, it was hit with a £1.5 million fine for audit failures that led to the collapse of TransTec, the engineering company led by Geoffrey Robinson, the former Paymaster-General.

Coopers & Lybrand, its predecessor firm, was also caught-up in the scandal over Robert Maxwell. Coopers was fined £1.2 million and ordered to pay costs of £2.1 million by accountancy profession regulators over failings in its auditing of the Maxwell group of companies.

PwC audits many leading Russian oil and gas companies. The Russian arm of the group said that its clients are responsible for half of Russia’s overall gross domestic product.

PwC in Russia said that its Russian clients had “worked successfully with us for many years, raising finance and entering capital markets”.

Yukos, which was seized by the Kremlin, is undergoing a bankruptcy procedure while its former head, Mikhail Khodorkovsky, is serving an eight-year sentence in a Siberian jail for tax evasion and fraud.

Many analysts have linked the fall of Yukos to a desire by Kremlin forces to exact punishment for the political ambitions of its key owners, in particular Khodorkovsky.

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