The Financial Reporting Council (FRC) has issued a final settlement decision on the imposed sanctions against PwC and former partner Richard Hughes, after it failed to properly challenge UK telecoms group BT once a half-a-billion-pound fraud was discovered.  

BT revealed a hit of around £513m from the Italian accounting fraud, as well as debt adjustments of £72m, in its accounts on 31 March 2017, which were examined by PwC.

PwC failed to gather sufficient audit evidence after discovering the fraud in BT Italian operations during its 2017 audit of the firm – the breaches were discovered as part of its wider probe into PwC’s audit work which also covered 2015 and 2016.

The FRC adjusted the £2.5m fine against PwC by 30%, discounted to £1.75m after the Big Four auditor admitted its failings in the BT audit.