MPs call on FRC to widen BHS audit probe into PwC
MPs urg the FRC to widen scope of its investigation to cover previous years when PwC audited BHS financial statements and signed off the company accounts as a going concern
MPs have called on the FRC to widen the scope of its investigation into PwC’s work as auditors of BHS.
In a letter to FRC chief executive Stephen Haddrill, the chairman of two select committees expressed concerns that the accounting watchdog’s probe into PwC’s conduct as auditors of the collapsed retailer is too narrow.
Frank Field and Iain Wright, chairman of the work and pensions and BIS committees, respectfully, urged the FRC to widen the scope of its investigation to cover previous years when PwC audited BHS financial statements and signed off the company accounts as a going concern.
PwC was questioned by MPs in May over why it described the embattled retailer as a ‘going concern’ just days before it was sold to a consortium with no retail experience for £1.
During a joint business, innovation and skills and work and pensions committee hearing into the collapse of BHS, MPs expressed their concerns as to why PwC had been prepared to sign off the troubled retailer’s accounts as a going concern, when the spectre of possible insolvency was looming and visible to both the pension scheme trustees and the company itself.
PwC audits of the accounts of other group companies of Taveta – BHS’s former owner – where the finances were interlinked with BHS should also be examined, the MPs said.
“We also urge you to set a deadline for concluding your investigation and clarify what steps you intend to take to ensure the FRC’s independence,” they said.
In June, the FRC launched an investigation into the conduct of the Big Four firm in relation to its audit of BHS for the year ending 30 August 2014 – the period leading up to the purchase of BHS by the Dominic Chappell-led Retail Acquisitions group.