PwC fined £5m over audit misconduct

The Financial Reporting Council (FRC) also fined PwC partner Nicholas Boden £114,750 for his role in a 2011 audit.

It follows a formal complaint by the FRC’s Executive Counsel in connection with their conduct in December.

PwC and Mr Boden admitted that their conduct fell “significantly short” and included failure to obtain sufficient appropriate audit evidence and failure to exercise “sufficient professional scepticism”.

The FRC described the misconduct as “extensive”, and pointed to five separate admitted acts in relation to the accrual of bonus payments, amounts recoverable on contracts, accounting for a lease, the assessment of the impairment of goodwill and the calculation of goodwill in relation to a subsidiary.

RSM Tenon collapsed into administration in 2013, after which it was acquired by Baker Tilly.

The FRC added that proceedings against Russell McBurnie, RSM Tenon’s former finance director, are ongoing.

It is not the first time this year that PwC has come under the FRC’s microscope.

In June, the watchdog opened an investigation into PwC’s audit of BT following the telecoms giant’s Italian accounting scandal.