Industry regulator, the Financial Reporting Council (FRC) has fined Big Four accountancy firm PricewaterhouseCoopers (PWC) and two partners after statutory audit reports at Redcentric in 2016 and 2017 were deemed “unsatisfactory”.
Jaskamal Sarai and Arif Ahmad accepted personal fines of £140,000 each, and have undertaken training in relation to compliance with the requirements of ISA 220.
The respondents each admitted the breaches prior to the issue of the Final Decision Notice and received a discount of 30% in relation to the fines.
PwC were fined £4.5m, reduced from £6.5m for admission of breaching regulations, and “early disposal”. The firm has also agreed to “supplement the monitoring and support of the Leeds Office audit practice on terms”.
The report also ruled that the breaches were “numerous and in certain cases were of a basic and/or fundamental nature, evidencing a serious lack of competence in conducting the statutory audit work”.
Claudia Mortimore, deputy executive counsel to the FRC, said: “The sanctions reflect the seriousness and extent of the breaches. Professional scepticism was lacking in this audit. Had it been applied, it is likely that certain material misstatements would have been detected.
“As this is the second Final Decision Notice involving PwC Leeds’ office in recent years, we have mandated that the firm supplements its ongoing monitoring and support for that office, to further improve the quality of audit work in the future.”