The fine is a record for an audit failure, with the FRC’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 PwC and Stephen Harrison, a retired PwC audit partner, who is fined £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 intangible assets.

PwC has also been ordered to pay the executive counsel’s costs and to make an interim payment on account of £1.5m.

There was controversy in March, when it was widely reported that PwC was going to be fined £6m in relation to the Connaught audit after information about the tribunal’s findings and sanctions were leaked to a national newspaper, apparently by an FRC member.

At the time, the regulator said: ‘We take breaches of confidentiality seriously and will investigate the matter thoroughly.’

The FRC now says it has no comment to make on the outcome of the investigation of the leak.

A separate FRC hearing which concluded in July 2016 saw former Connaught finance director Stephen Hill given a five-year exclusion and former deputy financial director David Wells a three-year ban, after the FRC found the pair, who are both ICAEW members, failed to account correctly for a £4m short-term loan in the company’s 2010 interim financial statements.

In a statement, PwC said: 'We are sorry that our work fell short of professional standards. Since 2010 when the case began, we’ve worked hard to improve our procedures and processes. Audit quality is of paramount importance to PwC and the FRC's annual audit quality assessments have shown a trend of improvement in our work over several years.'

Pat Sweet