A failure to realise that an audit client was a listed company has resulted in a £158,500 fine for MHA, an audit partner and audit director, as well as legal costs of £330,000
The Financial Reporting Council (FRC) has issued the sanctions against MHA, UK member firm of Baker Tilly International, for problems with the audit of MRG Finance UK plc for financial years 2018 and 2019 after it took on the listed entity and conducted the audits on an ‘incorrect basis’.
MRG is a Monaco-based corporation and is the holding company for several other companies form the Monaco Resources Group. The UK arm incorporated in May 2018 as a special purpose vehicle (SPV) to raise finance for the group’s businesses, which were focused on natural resources, agribusiness, logistics and technology.
The audit regulator said the primary breach in each audit year was the failure during the audit acceptance and continuance processes to identify and conduct the audits on the basis that the company was a public interest entity (PIE) because although it had not listed its shares, it had listed the bonds on the London Stock Exchange debt market.
