Aug 8, 2022
PwC fined £1.75mn over BT audit after alleged Italian fraud
The UK accounting regulator has fined PwC £1.75mn for failing to properly challenge BT's 2017 results after the discovery of an alleged fraud at the telecom group's Italian operations the previous year. The Financial Reporting Council on Monday said PwC and partner Richard Hughes, who led the BT audit, did not treat certain adjustments made to the 2017 accounts with "The necessary professional scepticism". The alleged fraud at the telecom group's Italian operations wiped billions of pounds off the company's value when it was revealed by BT and triggered a criminal trial in Italy, which is ongoing. PwC did not obtain appropriate audit evidence in relation to debt adjustments or determine whether changes in accounting estimates were appropriate after the alleged fraud was discovered. The fine is the third in as many months for PwC. In June, the firm was fined twice in one day for audit failures at London-listed construction groups Kier and Galliford Try and told to pay £5mn. Overall, the FRC imposed a record £46.5mn on accounting groups and partners in the 12 months to March.
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