Big Four Accounting Firm Fined for Negligence in BHS Collapse
- PwC fined £10m for BHS audit
- Steve Denison fined £500k and barred from auditing for 15 years
- Largest penalties handed out by the regulator
- Fines reduced to £6.5m and £325k for early settlement
- PwC must monitor Leeds Audit Practice, provide annual reports to FRC
- PwC admits to serious shortcomings in audit work
PricewaterhouseCoopers (PwC) has been hit with a record £10m fine for its handling of the BHS audits and the Taveta Group in 2014. The Financial Reporting Council (FRC) investigation began in June 2016, two months after the retailer’s collapse. PwC signed off on BHS as a ‘going concern’, which led to its sale to Dominic Chappell’s Retail Acquisitions and eventual collapse, costing 11,000 jobs and a £571m pension deficit. PwC and audit partner Steve Denison were fined for not disputing the directors’ assessment of the company. The penalties are the largest ever handed out by the regulator but will be reduced to £6.5m and £325k for early settlement. Denison is barred from auditing for 15 years and removed from the statutory auditors’ register for 15 years. Both parties admitted misconduct and accepted non-financial sanctions. PwC must also review policies and procedures for high-risk, high-profile companies and provide annual reports to the FRC on its Leeds Audit Practice. The firm stated that the incident was not representative of their usual quality work but acknowledged serious shortcomings.
Factuality Level: 9
Factuality Justification: The article provides accurate information about the fines imposed on PwC and Steve Denison for their handling of BHS audits and Taveta Group, details about the investigation, and the measures taken by PwC to improve its audit practices. It also includes a statement from PwC acknowledging the shortcomings in their work.
Noise Level: 3
Noise Justification: The article provides relevant information about PwC being fined for their handling of the BHS audits and the consequences faced by Steve Denison. It also includes statements from PwC admitting to shortcomings in their audit work and actions taken to improve procedures. The article stays on topic and supports its claims with evidence, making it a relatively informative piece.
Financial Relevance: Yes
Financial Markets Impacted: PwC, BHS, Taveta Group, Dominic Chappell’s Retail Acquisitions
Financial Rating Justification: The article discusses a fine imposed on PricewaterhouseCoopers (PwC) for their handling of the BHS audits and its impact on the company’s financial situation, which led to its collapse and job losses. It also mentions the penalty imposed on PwC partner Steve Denison.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the text
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