BRITAIN's accounting watchdog has fined PwC and two of its former partners a combined sum of almost £8m over repeated failures in the firm's audits of UK defence company Babcock International and its Plymouth dockyard subsidiary.

The UK's Financial Reporting Council (FRC) hit PwC with a £7.5m fine - discounted to £5.625m for the firm's compliance - over its repeated failures to properly scrutinise Babcock's accounts.

The watchdog said PwC repeatedly failed to challenge Babcock's management in its 2017 and 2018 audits of the firm and failed to obtain sufficient evidence to properly carry out its job.

The FRC said that, in auditing Babcock, PwC failed to get hold of a 30-year contract that accounted for around £77mworth of the defence company's 2018 revenues. The Big Four auditor also failed to translate a 10-year government contract, written in French, worth €640m, despite the fact no one on PwC's audit team had sufficient language skills to interpret it properly. A PwC spokesperson said: "We're sorry that the work in question was not of the standard required and that we demand of ourselves."

(c) 2023 City A.M., source Newspaper