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The UK Financial Reporting Council (FRC) has fined PwC £1.75 million for failing to audit British telecommunications giant BT.
On BT, fraud of more than half a billion pounds was previously uncovered within the telecommunications company’s Italian branch. Based on FRC, PwC and related audit partners demonstrate insufficient professional skepticism and base their opinions on insufficient audit evidence.
Given the situation in BT Italy, there was insufficient audit documentation prepared by PwC “to also enable experienced auditors who had no relationship with the audit to understand the nature, timing and extent of audit procedures performed,” said the supervisor.
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PwC acknowledged the shortfall and the FRC fine was reduced from £2.5 million to £1.75 million. The partner involved also admitted that he had failed and was eventually fined £42,000.
In June, the FRC also imposed a £5 million fine on PwC for lax controls on two major British construction companies. Other offices also received hefty fines for failed checks. Therefore, the total amount of fines from regulators was much higher last year compared to the previous year.
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