The Financial Reporting Council (FRC) has commenced an investigation into the statutory audits by PricewaterhouseCoopers LLP (PwC) of Babcock International Group plc.
The audits in question were of the consolidated financial statements of Babcock International Group plc for the years ending 31 March 2019 and 2020.
The decision was made at a meeting of the FRC’s Conduct Committee on 14 December 2021.
The FRC said it follows public announcements regarding the outcome of the Contract Profitability and Balance Sheet review (CPBS) commissioned by Babcock.
Additionally, the investigation will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure.
Meanwhile, the FRC also has another ongoing investigation into aspects of the statutory audits by PwC of the consolidated financial statements of Babcock. This is for the years ending 31 March 2017 and 31 March 2018, which followed the outcome of an audit quality review.
A spokesperson for PwC told Accountancy Today: “We will cooperate fully with the FRC in its enquiries. Audit quality is of paramount importance and we remain committed to our ongoing programme to enhance audit quality and to the delivery of consistently high quality audits.
“The FRC’s annual reviews of our audit work, policies and procedures show a continued trend of improvement in our work and we use their insights, together with our own reviews, to continuously improve how we deliver high quality audits.”