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Fri May 07 2021

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Connaught auditors fined £5m for misconduct

12 May 17 Accountancy firm PwC has been ‘severely reprimanded’ and fined £5m for misconduct in relation to its 2009 audit of housing maintenance firm Connaught.

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.

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