The Financial Reporting Council (FRC) has fined PwC £5m for misconduct regarding the audit of collapsed property services firm Connaught.
Today, the FRC announced it had "severely reprimanded" PWC and Stephen Harrison, a retired audit partner at the firm who received a separate fine of £150,000, in relation to the 2009 audit of the failed FTSE 250 business.
The fines were handed out after an FRC investigation and a 12-day hearing. An independent tribunal, chaired by Sir Stanley Burnton, made findings of misconduct in relation to three areas of audit: mobilisation costs, long term contracts and intangible assets.
PwC was also ordered to pay the executive counsel’s costs and to make an interim payment on account of £1.5m.
The FRC revealed in 2015 that it had decided to act on complaints against the accountancy giant and Harrison over the auditing of Connaught.
The regulator accused the company and Harrison of "fail[ing] to act with competence and due care in relation to the audit of their financial statements".
PwC said today: "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."