The Big Four accounting giant PwC has become the first audit firm to be fined by the City regulator after it was handed a £15 million penalty for failing to raise concerns about suspected fraud at London Capital & Finance.
An investigation by the Financial Conduct Authority (FCA) found that PwC’s audit team encountered several “red flags” during their work on the minibond company’s 2016 accounts but did not alert the watchdog, even though they were “duty bound to report those suspicions”.
Therese Chambers, joint executive director of enforcement and market oversight at the authority, said: “They should have acted on them immediately. Their failure to do so deprived the FCA of potentially vital information.”
The FCA’s fine comes after the Financial Reporting Council, the