Deloitte's Glencore audits under FRC scrutiny
The Financial Reporting Council (FRC) has launched a formal investigation into Deloitte’s audits of Glencore plc and its UK subsidiary, Glencore Energy UK Limited, covering financial statements between 2013 and 2020.
The UK audit watchdog is assessing whether Deloitte “gave sufficient consideration to the risk of non-compliance with laws and regulations” during its statutory audit work.
The decision to investigate was taken by the FRC’s conduct committee in March but was only disclosed publicly on Wednesday.
The move follows extensive legal scrutiny of Glencore’s operations.
In 2022, the multinational commodity trader pleaded guilty to seven counts of bribery and was ordered to pay £281m in fines, confiscated profits and costs by a UK court—the largest such penalty at the time.
The Serious Fraud Office (SFO) revealed that Glencore employees and agents paid approximately $27m in bribes to public officials in multiple African countries, often transporting cash in private jets and concealing payments through falsified documents.
The company’s legal exposure has continued. Last year, the SFO charged five former Glencore employees, including its former head of oil trading Alex Beard, with conspiracy to make corrupt payments in West Africa. The case is set for trial in 2027.
While Glencore declined to comment on the FRC’s announcement, a spokesperson for Deloitte UK said: “We are committed to the highest standards of audit quality and will fully co-operate with the Financial Reporting Council.”
The regulator’s investigation is being conducted by its enforcement division. It comes as Deloitte, one of the UK’s Big Four audit firms, faces increasing regulatory pressure.
The firm has received four FRC sanctions over the past five years, with total fines exceeding £18.5m (post-discount).
The FRC’s probe into Deloitte underscores the heightened regulatory focus on auditors’ roles in identifying and responding to legal and compliance risks—particularly when the companies in question are facing serious allegations or convictions of misconduct.
