Connaught was a FTSE 250 company that collapsed into administration in 2010 with debts of £220m. The auditors failed to see the distress signals.
The Financial Reporting Council (FRC) conducted an exhaustive five-year investigation into the role of PwC. The independent tribunal, chaired by the Rt Hon Sir Stanley Burnton, made findings of misconduct in relation to three areas of audit: mobilisation costs, long term contracts and intangible assets.
Stephen Harrison, a retired PwC audit partner, was personally fined £150,000 and also reprimanded.
PwC was also ordered to pay the executive counsel’s costs and to make an interim payment on account of £1.5m.