The UK accounting regulator has fined PwC £5.6mn for failings in its audits of defence group Babcock over two years.
The investigation covered a number of areas of the audits, including seven long-term contracts, which made up about a quarter of Babcock’s revenue in the financial year ended March 2018.
The Financial Reporting Council said on Wednesday it found serious breaches during audits of accounts for the 2017 and 2018 financial years, including repeated failures by PwC to challenge Babcock’s management and obtain sufficient appropriate evidence during its work.
The FRC reprimanded two former PwC audit partners. Nicholas Campbell Lambert, who led the Babcock audit, was fined £150,000, while Heather Ancient, who headed the audit of a Babcock subsidiary, was ordered to pay £48,750.
The FRC is still investigating PwC’s audits of accounts for the 2019 and 2020 financial years.