(Sharecast News) - The Financial Reporting Council has fined accounting firm BDO and two former audit engagement partners a total of £6.8m after admitting to misconduct relating to historic audits.
An investigation by the FRC found that a BDO senior manager was able to pursue "a dishonest course of conduct on numerous audits between 2015 and 2019", a statement from the regulator said on Thursday. This included creating false audit evidence, which caused reports to be issued without approval from audit engagement partners, and copy and pasting partners' signatures into auditors' reports without approval.

The FRC said that BDO, which was fined £6.5m in the case, had an "inadequate response" to internal reporting regarding the senior manager's actions, and failed to provide sufficient audit supervision by engagement partners.

The audit engagement partners mentioned in the probe - John Everingham and Kevin Cook - also failed to adequately supervise, monitor and oversee a total of 34 audits collectively, the FRC also said.

While Everingham and Cook were fined £189,000 and £90,000 respectively, the FRC said that BDO was liable for their misconduct, along with the unnamed senior manager.

Jamie Symington, deputy executive counsel at the FRC, said the failings by BDO and the two partners "undermin[ed] the integrity and quality of numerous audits".

"Even when evidence of the Senior Manager's misconduct did emerge, the firm failed to take the steps necessary to investigate it, and to protect their clients. The substantial sanctions imposed reflect the extent to which the serious failings established in this case will undermine confidence in audit and the accountancy profession," Symington said.

Amanda Nightingale, the ex-BDO senior manager in question who left the firm in 2019, was last year excluded from the Institute of Chartered Accountants in England and Wales (ICAEW) and not allowed to undertake any accountancy work for a period of 20 years.

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