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.
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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.
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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.