The UK’s accounting watchdog has fined audit firm PwC a record £5.1m (€5.6m) and given it a severe reprimand after it admitted misconduct when auditing collapsed accounting firm RSM Tenon.
The Financial Reporting Council said PwC and senior audit partner Nicholas Boden admitted a series of failures when they signed off RSM Tenon’s accounts for the year to June 2011.
“The admitted acts of misconduct include failures to obtain sufficient appropriate audit evidence and failures to exercise sufficient professional scepticism,” it said in a statement.
The council warned last month that accountants should move to challenge information provided by clients.
RSM Tenon, which had been listed on the London Stock Exchange, collapsed in 2013 and its assets were taken over by Baker Tilly.
The council said PwC’s misconduct was extensive, comprising five separate admitted acts over the accrual of bonus payments, the accounting for a lease, the assessment of goodwill impairment and other aspects of the audit.
The council said PwC had to pay a fine of £6m, reduced to £5.1m after a settlement discount as well as a £500,000 contribution to the watchdog’s costs.
Mr Boden, who was PwC’s senior audit partner for RSM Tenon, was fined £114,750 and given a severe reprimand.
PwC, one of the world’s top four accounting firms, said it accepted the council’s findings and was sorry that aspects of the audit carried out in 2011 fell short of professional standards.
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