- PwC fined a record £5.1m over RSM Tenon audit
The Financial Reporting Council (FRC) slapped PwC with a record fine of £5.1m over misconduct relating to their audit of RSM Tenon in the financial year ending 30 June 2011.
Nicholas Boden, senior statutory auditor and audit engagement partner and ICAEW member, was also fined £114,750.
PwC and Boden admitted they had fallen short of expected standards and failed to act in accordance with the ICAEW’s Fundamental Principle of Professional Competence and Due Care. Their admitted misconduct included failure to obtain appropriate audit evidence and exercise sufficient professional scepticism.
- PwC fined £5m over Connaught audit
Before the RSM Tenon fine, the FRC first hit PwC with an at-the-time record fine of £5m over their audit of property services group Connaught.
The misconduct related to an audit carried out in 2009, before the company went into administration in 2010. The FRC found misconduct in three areas: mobilisation costs, long-term contracts and intangible assets.
Retired PwC audit partner Stephen Harrison was also reprimanded and fined £150,000 for his role in the audit.
- KPMG Miller Energy audit fine £4.8m
KPMG was fined $6.2m (£4.8m) by the US Securities and Exchange Commission (SEC) over its audit of Miller Energy.
The firm issued an unqualified report of Miller Energy’s 2011 financial statements despite the company grossly overstating the value of certain assets and counting some twice.
The SEC stated that KPMG and John Riordan, KPMG’s engagement partner, failed to properly assess the risks and did not provide adequate staff.
Riordan was fined $25,000 and was suspended from practicing before the SEC as an accountant.
- EY Tech Data audit fine £1.8m
The FRC fined EY £1.8m over misconduct relating to the audit of the financial statements of Tech Data Limited for the financial year ending 31 January 2012.
The audit misconduct related to a failure to obtain reasonable assurance that the financial statements were free from material misstatement, failure to obtain sufficient appropriate audit evidence and failure to exercise sufficient professional scepticism.
Julian Gray, senior statutory auditor and audit engagement partner was also fined £59,000 after he and the firm admitted that their conduct “fell significantly short” of the expected standards.
- PwC Merrill Lynch $1m fine
US-based watchdog The Public Company Accounting Oversight Board (PCAOB) fined PwC $1m (£760,000) over its 2014 audit of Merrill Lynch.
PCAOB levied this fine following PwC’s failure to observe rules relating to customer protection when auditing Merrill-Lynch.
The watchdog asserted that PwC failed as auditor when it did not obtain sufficient evidence of Merrill-Lynch’s compliance with these rules before issuing its audit reports.