Monday 14 October 2019 1:00 am

Auditors slapped with rising fines after turbulent year

Britain’s beancounters faced rising fines over the last year, as the industry’s watchdog upped its penalties following a series of major accountancy scandals.

The Financial Reporting Council (FRC) fined audit firms roughly £24.3m in the year to the end of September, rising 44 per cent on the previous year, according to new Thomson Reuters research.

Read more: FRC probes EY audit of Thomas Cook accounts

Higher fines come after a turbulent year for the big four accountancy firms, which have come under public scrutiny following high-profile company collapses such as Carillion and Patisserie Valerie.

Next year the FRC is to be replaced by a new regulator – the audit, reporting and governance authority (Arga) – which is expected to be granted powers to impose tougher fines.

“The increase in fines has set a clear direction of travel for the FRC as it transitions into a new entity,” said Brian Peccarelli, chief operating officer of customer markets at Thomson Reuters.

Read more: Audit watchdog beefs up standards

Additional findings show that US watchdogs have also been taking a tougher approach to the regulation of auditors regarding fines over the last year.

The value of fines for audit failures imposed by the Securities & Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) hit $64.7m last year, up from $12.5m the year before, although this does include a few particularly high value fines.