In our monthly roundup of developments in audit and governance, PwC hit with record £5m Connaught fine, Grant Thornton fined £2.2m for AssetCo audit, Deutsche Bank governance issues and, FRC to probe KPMG audits of Rolls-Royce
PwC hit with record £5m Connaught fine
The Financial Reporting Council (FRC) is to fine PwC a record penalty of £5m following its findings of misconduct relating to the audit of Connaught, the FTSE 250 listed social housing provider which went into administration in 2010.
The fine is a record for an audit failure, with the audit watchdog’s biggest previous fine being the £4m sanction given to Deloitte in November 2016 over audit failings at AIM-listed Aero Inventory.
The regulator has also severely reprimanded the Big Four audit firm and Stephen Harrison, a retired PwC audit partner, who has been given a personal fine of £150,000.
The sanctions follow an FRC investigation and a 12‑day hearing which resulted in findings of misconduct in relation to three areas of the 2009 audit of Connaught: mobilisation costs, long-term contracts and treatment of intangible assets.
