In reflect of this month’s exclusive FTSE 250 auditor’s survey, Sara White considers audit failures on the back of the record £5m fine given to PwC by FRC and ask whether the audit regulator is effective enough
Auditors are under pressure from all sides as the regulator ramps up its sanctions, calling out audit failures and highlighting a continuing problem over audit quality. The scale of fines does appear to be hardening as just last month the Financial Reporting Council (FRC) meted out a record multimillion pound fine to Big Four firm PwC over audit misconduct related to the now defunct Connaught housing provider.
The auditors were castigated for audit misconduct relating to mobilisation costs, long‑term contracts and intangible assets. Connaught was not the only audit failure either to be flagged in the same month although its sheer scale is difficult to beat.
FRC fines are on an upward trajectory rising from £4.68m in 2015 to £6.71m in 2016. So far this year it has already issued a record £7.73m in sanctions.
