PwC has been fined £4.55 million after a £20 million hole was found in the accounts of IT managed services provider Redcentric.
The auditor was found by the Financial Reporting Council (FRC) to have shown a “serious lack of competence in conducting the statutory audit work”.
Two individuals from PwC were also fined £200,000 each – discounted to £140,000. PwC’s fine was reduced from £6.5 million.
Claudia Mortimore, deputy executive counsel to the FRC, said: “The sanctions reflect the seriousness and extent of the breaches. Professional scepticism was lacking in this audit. Had it been applied, certain material misstatements would likely have been detected. As this is the second Final Decision Notice involving PwC Leeds’ office in recent years, we have mandated that the firm supplements its ongoing monitoring and support for that office, to further improve the quality of audit work in the future.”
The errors were investigated by both the FRC and the Financial Conduct Authority.