The Financial Reporting Council (FRC) is to resume its hearing of a formal complaint against PwC and retired partner Stephen Harrison later this week, concerning their conduct in relation to the audit of the financial statements of Connaught plc and its subsidiaries, for the year ended 31 August 2009
The social housing provider and its subsidiaries collapsed into administration in 2010, with the loss of more than 1,000 jobs. The formal complaint alleges that the conduct of PwC and Harrison ‘fell significantly short of the standards reasonably to be expected of a member firm and a member’.
A separate 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.
Hill admitted that his conduct was sufficiently reckless to have amounted to acting with a lack of integrity. As well as the five-year exclusion, he agreed to pay £133,397 towards the executive counsel’s costs.
Wells admitted that he failed to act in accordance with the ICAEW’s fundamental principles of objectivity and ‘professional competence and due care’, and agreed to pay £125,198 in costs as well as a three year exclusion.
The hearing into the complaint against PwC and Harrison is scheduled for 10am on 16 March.
