Two more PwC audits investigated by FRC
PwC is under investIgation by the Financial Reporting Council over its audits of construction groups Kier and Galliford Try.
It means the regulator is now looking into seven audits by PwC. The others include Babcock, BT, Eddie Stobart, London Capital & Finance and Wyelands Bank, owned by the steel magnate Sanjeev Gupta.
The regulator has raised a number of issues with Galliford Try including its recognition two years ago of an £80 million legal claim related to the Aberdeen bypass project as an asset. BDO was brought in to replace PwC which had audited the firm for 20 years.
Last week Carillion’s liquidators launched a £1.3 billion claim against KPMG, the company’s auditor, which they said had missed “multiple red flags”.
There is an understanding that auditing contractors’ accounts is particularly complex because of such matters as how much profit a company might make on a contract that is not scheduled to finish for years.
PwC scored the highest of the Big Four accountants in the FRC’s most recent audit quality checks, with 80% of its audits meeting the set standards