Watchdog calls for tougher reprimands on firms

ACCOUNTING'S WATCHDOG has called for harsher penalties on firms following PwC's reprimand.

A record fine of £1.4m was handed down to PwC for failing to flag up non-segregation of JP Morgan Securities Limited's client assets for seven years to 2008.

However, Tom Martin, Accounting and Actuarial Discipline Board (AADB) executive counsel, told Accountancy Age he hopes to start a consultation which could see larger fines imposed on accountancy firms.

"We're thinking of reform at the AADB. This many now be a point to have a debate on financial sanctions on accountants to ensure that it is proportional," he said.

He believes that a debate among key stakeholders is needed to ensure sanctions match the public interest.

PwC's reprimand is the largest on record, surpassing the £1.2m fine handed down to the firm's predecessor Coopers and Lybrand for its audit work of Robert Maxwell's businesses.

The tribunal said that fines have been historically "too low" and there is a "need for a substantial increase in the level of penalty payable for misconduct".

The fine is closer to the figure suggested by PwC for its reprimand - of between £500,000 and £1m, compared to other figures bandied around during the process of up to £44m.

A spokesman for PwC said: "We are pleased that this matter has now been concluded. We regret that one aspect of our work on the private client money report to the FSA fell beneath our usual high standards.

"When the issue was identified, and before any complaint had arisen, we took action to ensure that staff received additional training in the client monies area."