Ex-RSM Tenon CEO fined; ex-FD and PwC face complaints over its accounting

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THE FORMER CEO of collapsed firm RSM Tenon has been fined and reprimanded over its accounting, with both its former FD and auditor PwC facing complaints from the profession’s watchdog.

Andy Raynor, one of the best-known faces within the profession who served as RSM Tenon CEO during its rise and fall, has been fined £40,000, reprimanded and ordered to pay £50,000 to executive counsel costs by the Financial Reporting Council (FRC).

In a settlement with the FRC, Raynor admitted that his conduct “fell significantly short” of that expected by an ICAEW member. He failed to obtain the necessary level of assurance required in relation to the accounting treatment of bonus accruals and a lease, and sign off on the financial statements of RSM Tenon on the basis that they were in accordance with applicable accounting standards and represented a true and fair view of the state of affairs of the company – in relation to its y/e 30 June 2011 accounts.

Raynor’s £40,000 fine was reduced to £26,500 after mitigation and a settlement discount.

RSM Tenon was sold in a pre-pack administration to Baker Tilly in 2014. The former listed consolidator’s problems emerged when it had to restate its 2011 and 2012 accounts in relation to its accounting policy for referral fees, and errors in recording employee bonuses.

PwC were subsequently ditched as auditors and replaced by BDO. RSM Tenon was unable to right the ship, slipping into insolvency after failing to pay off its debts.

Baker Tilly subsequently left its own eponymously-titled accounting network to join RSM.

Ex-FD and PwC face complaints

The watchdog’s executive counsel has issued a complaint against PwC, its senior statutory auditors and RSM Tenon engagement partner Nicholas Boden, and to RSM Tenon’s former FD Russell McBurnie.

The complaint against Boden and PwC alleges that they “failed to act in accordance with the fundamental principle of professional competence and due care” in relation to the audit of the financial statements of RSM Tenon, and that their conduct “fell significantly short of the standards reasonably to be expected” of an ICAEW member or member firm.

The counsel also alleges that McBurnie “failed to act in accordance with the fundamental principles of integrity and professional competence and due care” in relation to the preparation and approval of the financial statements of RSM Tenon, and his conduct “fell significantly short of the standards reasonably to be expected” of an ICAEW member.

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