PwC fined £5.6m after ‘lack of competence’ in Babcock audits

PwC and two former audit partners have been handed a multimillion pound fine for audits of Babcock which ‘fell far short of the standards expected of statutory auditors’

The penalty related to the statutory audit of Babcock International Group plc and a subsidiary, Devonport Royal Dockyard Limited, relating to financial year ends 31 March 2017 and 31 March 2018.

Babcock is a multinational engineering corporation headquartered in the UK and has extensive contracts with the Ministry of Defence.

The Financial Reporting Council (FRC) investigation concerned a number of areas of the audits, including seven long-term contracts, representing approximately 25% of the FY2018 Babcock group revenue. There are still ongoing FRC probes into the audits for FY2019 and FY2020 Babcock group financial statements.

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