PwC has been fined £2.5m by the audit watchdog for its failings following the discovery of massive fraud at the Italian unit of telecoms firm BT in 2016.
BT discovered fraud at its Italian business in 2016, forcing it to issue £513m of adjustments to its 2017 financial statements.
The Financial Reporting Council found that PwC did not act with sufficient skepticism in relation to BT’s adjustments during its 2017 audit, and also did not adequately document its work.
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The audit watchdog fined PwC £2.5m (reduced to £1.75m to reflect the firm’s co-operation) and fined its former partner Richard Hughes £60,000 £, reduced to £42,000.
“We regret that some aspects of this audit were not of the required standard,” PwC said in a statement.
PwC audit partner Hughes retired from the firm in July, according to his LinkedIn profile. Hughes was contacted for comment.
The FRC did not find that the adjustments to BT’s 2017 accounts were wrong or that PwC’s errors were intentional, dishonest or reckless.
The regulator also closed its investigations into PwC’s 2015 and 2016 audits of BT without taking action against the company.
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PwC was fined more than £8m for shoddy audits of construction firms Kier Group and Galliford Try, the FRC announced in June.
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