PwC fined R87m in largest-ever sanction from UK regulator

(iStock)
(iStock)

London - PricewaterhouseCoopers was fined £5.1m (R87m) for misconduct over its audit of RSM Tenon in the largest-ever sanction issued by the UK accounting regulator.

The Financial Reporting Council announced the fine on Wednesday, along with penalties against Nicholas Boden, a senior PwC audit partner. The misconduct related to an audit of RSM’s accounts for the year ended June 2011. RSM is a professional services firm offering advice on taxes and risk.

The record penalty comes only three months after PwC incurred another record fine for misconduct over its audit of Connaught, a FTSE 250 company that went into administration in 2010. The FRC issued a £5m sanction against the auditor over the Connaught work in May, marking the then-largest-ever penalty from the regulator.

“We are sorry that aspects of the audit carried out in 2011 fell short of professional standards," a PwC spokesperson said in an emailed statement. “We continually review and update our audit processes in response to both internal reviews and external inspection findings.”

PwC would have been fined £6m over RSM if it hadn’t received a settlement discount, the FRC said on Wednesday. The auditor must also pay £500 000 toward the FRC’s costs.

A spokesperson for PwC said Boden is a partner at the firm and declined to comment further.

The FRC said proceedings against RSM’s former finance director, Russell McBurnie, continued. Spokespeople for RSM didn’t respond to email requests for comment.

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