PricewaterhouseCoopers (PwC), which audited the accounts of collapsed British retail chain BHS, has been fined 10 million pounds ($13.4 million) and ordered to review all policies for handling high-risk firms after a two-year inquiry in which it admitted misconduct, the UK's Financial Reporting Council (FRC) said on Wednesday.
The fine is to be reduced by 35 percent to 6.5 million pounds for agreeing to an early settlement, the FRC said. (bit.ly/2sRWz3Q)
In addition, Steve Denison - one of the company's former partners, has been fined 500,000 pounds, reduced to 325,000 pounds in return for his cooperation with the inquiry.
Denison, who was also banned from audit work for 15 years, left PwC this month after a nearly 33-year career there, according to his LinkedIn profile. He did not immediately respond when contacted via LinkedIn.
The FRC launched an investigation into the PwC audit in 2016, a year after it signed off BHS as a "going concern" and billionaire retailer Philip Green sold the loss-making group for one pound.
"We recognize and accept that there were serious shortcomings with this audit work and that it is important to learn the necessary lessons," PwC said in an emailed comment to Reuters.
"We are sorry that our work fell well below the professional standards expected of us and that we demand of ourselves."
The FRC also ordered PwC to supply detailed annual reports about its audit practice in Leeds to the FRC for the next three years and to review and amend its broader policies to ensure audits of all non-listed high-risk or high-profile companies were subject to an engagement quality control review.
The failure of BHS, a 180-store chain, was the biggest collapse in the British retail industry since the demise of Woolworths in 2008. It prompted intense scrutiny.
BHS's pension deficit had ballooned to 571 million pounds by the time the retailer went into administration in April 2016, a figure based on what an insurance company would pay if it were to buy out the funds. About 11,000 jobs were lost.
Last year, Green paid 363 million pounds to BHS's pension schemes.