FRC fines PwC £2.3m over Cattles audit

PwC has been fined £2.3m by the Financial Reporting Council (FRC) over failures in its audit of sub-prime lender Cattles and its operating subsidiary Welcome Financial Services Ltd (WFS), while former audit partner Simon Bradburn has been severely reprimanded and given a £75,000 fine.

The disciplinary case related to PwC’s audits of the financial statements of Cattles and WFS for the year ended 31 December 2007.

The firm and Bradburn have admitted that their conduct fell significantly short of the standards to be expected in issuing unqualified audit opinions in circumstances where PwC had insufficient audit evidence as to the adequacy of the loan loss provision and, additionally, had failed to identify the fact that the impairment policy was not adequately disclosed and that the disclosures in those financial statements were not in compliance with IFRS 7.