Fine: PWC signed off the books at BHS before the high street chain collapsed
The £10million fine slapped on accounting giant PwC has been branded ‘totally inadequate’ as pressure mounts on regulators to get tough on failing auditors.
Big Four accountant PwC has been hit with the fine by the Financial Reporting Council after it signed off BHS as a going concern in 2015 – just days before it was sold by retail tycoon Sir Philip Green to serial bankrupt Dominic Chappell for £1.
They approved the accounts at the High Street retailer despite knowing the sale would cut it off from crucial support from Taveta.
BHS collapsed about a year later with the loss of 11,000 jobs and leaving a massive black hole in the pension fund.
PwC’s fine was reduced to £6.5million because of its co-operation with the inquiry. Steve Denison, the partner who oversaw the BHS audit, was fined £500,000 – later reduced to £325,000 – and banned from doing similar work for 15 years.
Since April last year the FRC has dished out fines of more than £30million to auditors over botched work.
PwC accounts for more than two-thirds of the penalties, having been fined £5million for its work on Connaught and £5.1million for its audit of RSM Tenon.
Rival KPMG was this month fined £4.5million for its failures over scandal-hit Quindell.
But critics said the fines were tiny compared to auditors’ and partners’ earnings.
Frank Field MP, chairman of the work and pensions committee, said: ‘The fine of £10m for one year’s audit of one company accounts for a full third of all the financial penalties imposed by the FRC over the last year.
‘Welcome as this apparent step change is, it is still totally inadequate given the horror show at BHS.’
MPs have now written to the FRC to ask whether it will launch a wider investigation into PwC’s work on BHS parent company Taveta – adding that they may want to see the fines increased.
Former BHS boss Chappell is understood to be considering legal action over PwC’s discredited audit of the retailer. It is thought his argument centres on his use of the accounts that were rubber-stamped by PwC as the basis for his acquisition.