Deloitte fined by FRC for audit failures

Deloitte has been fined £362,500 by the Financial Reporting Council (FRC) after the company failed to relate to the audit of a former client’s defined benefit pension scheme.

Deloitte did not ensure that the work carried out by the Engagement Quality Control Review (EQCR) was properly documented. The FRC also said that the company did not obtain sufficient audit evidence to substantiate the cash holding of the client’s defined benefit pension scheme.

The former client in this case has not been named by the FRC.

“We acknowledge and regret that aspects of our audit work for this entity did not comply with the relevant standards. However as the FRC has recognised, these did not call into question the truth or fairness of the financial statements in question,” said a spokesperson from Deloitte.

“Audit quality remains our priority and we continue to enhance our audit quality processes and to seek improvement across all of our work.”

Claudia Mortimore, who is the Deputy executive counsel to the FRC commented: “The proportionate sanctions reflect the failures by the respondents to obtain sufficient appropriate audit evidence and to properly document work in significant areas of audit risk, but also recognise the limited nature of the breaches, which did not call into question the truth or fairness of the financial statements.”