One of Britain’s largest accountancy firms has been slapped with a £250,000 fine over auditing failures of a local authority’s 2019 financial statements.
The Financial Reporting Council (FRC), the accounting regulator, said that Mazars’ audit of an unnamed local authority “fell far short of the applicable standards and regulations” and had the “potential to undermine confidence in the standards in general of registered auditors.”
FRC said that the most significant failing of Mazars was in respect to its valuation of property and plant equipment used by the local authority, where there was “insufficient and undocumented challenge” of costs.
The FRC noted that the fine had been reduced to £250,000 from £314,000 in lieu of Mazar’s cooperation with the investigation.
The sanction against Mazars arrives just two months after the FRC found that a third of local government audits need improvements, warning that of 20 major audits probed six fell below standard.
Mazar’s fine comes as mid-tier accountancy firms look to snap up market share from the big four which have suffered their own series of high profile audit failures in recent years.
Mazars is the third biggest auditor of large local government authorities and health bodies in England, holding 15 per cent of the market, according to the FRC
A Mazars spokesperson said: “Having worked closely with the FRC throughout its investigation, we accept and regret that the quality of our work did not meet the standards expected.”