PwC fined £4.5m over 2016 Redcentric audits
Big Four accounting firm PricewaterhouseCoopers has been fined £4.55m over its 2016 audit of IT management firm Redcentric, the Financial Reporting Council said on Thursday.
The original fine was £6.5m but was reduced after PwC's admissions during the FRC's probe. Two partners were each handed a £140,000 fine each and, alongside the accounting giant, were given a severe reprimand.
PwC partners Jaskamal Sarai and Arif Ahmad committed a number of policy breaches relating to their “failure to exercise professional scepticism”, the FRC said.
The Redcentric statements involved in the issue concern the financial years ending 31 March 2015 and 31 March 2016.
Redcentric’s 2016 financial statements were extensively restated, with net assets written down by £15.8m, and £5.3m pre-tax profits restated to be a £4.2m loss.
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.”