The decision from the state-run carmaker comes as PwC's Russian division waits to find out whether its license to operate in the country will be extended.
AvtoVAZ said in a statement that its board would recommend that shareholders appoint Ernst & Young to conduct its 2007 audit. Ernst & Young had been chosen over rival bids from PwC and Deloitte & Touche, after "examination of the technical and financial proposals," AvtoVAZ said.
A court late last month fined PwC 16.8 million rubles ($646,600) over its audit of bankrupt Yukos. The court ruled that the auditor had breached rules by preparing two separate audits for Yukos, one for internal use warning of illegal action and a second one for shareholders.
PwC has denied any wrongdoing in its dealing with Yukos and has said it will appeal against the ruling by the Moscow Arbitration Court.
Analysts say the government intends to complete the liquidation of Yukos this year and wants to give its proceedings against this company a purely economic flavor instead of a political one. Allegations of improper audits may play an important part of this process, analysts say.
Police also searched the offices of the auditor in central Moscow last month, as part of a high-profile standoff.
The final decision on PwC's operational license will come from the Finance Ministry. PwC says it audits many of the country's most prominent businesses, accounting for half of Russia's gross domestic product.
PwC also faces a further demand to pay $11 million in back taxes.
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