PwC has been fined £4.55 million over the conduct of its audit of Redcentric.
PwC was dealt the fine by The Financial Reporting Council (FRC), the UK’s audit regulator.
The FRC had initially fined the auditor £6.5 million, however it was reduced after PwC publicly apologised for its mistakes.
The council also imposed sanctions against two partners, Jaskamal Sarai and Arif Ahmad, in relation to an audit conducted between March 2015 and March 2016.
Both individuals were fined £140,000 pounds each.
Claudia Mortimore, Deputy Executive Counsel to the FRC, said in a statement:
“The sanctions reflect the seriousness and extent of the breaches. Professional scepticism was lacking in this audit. Had it been applied, it is likely that certain material misstatements would have been detected. As this is the second Final Decision Notice involving PwC Leeds’ office in recent years, we have mandated that the firm supplements its ongoing monitoring and support for that office, to further improve the quality of audit work in the future.”
A PwC spokesperson added: ‘We are sorry that our work fell below the professional standards expected of us. Since the work in question was completed, we have taken numerous steps to strengthen processes. In addition, this month we announced an additional £30m investment annually as part of a new wide-ranging action plan to provide greater focus on the quality and public interest responsibilities of PwC’s statutory audit services.
Accountancy firms such Deloitte, KPMG, EY and PwC are under pressure amid calls for reform in the industry.
MPs have called for the so-called ‘Big Four’ to be broken up to lessen their “stranglehold” on the industry.