FRC investigates PwC over Redcentric audit

The Financial Reporting Council (FRC) has launched an investigation into the conduct of PwC in relation to the audit of IT managed services provider Redcentric plc.

The investigation relates to financial statements for the years ending 31 March 2015 and 31 March 2016.

On 7 November 2016, Redcentric announced that an internal review by the company’s audit committee had found misstated accounting balances, prompting a forensic review of the group’s historic balance sheets by Deloitte and law firm Nabarro. CFO Tim Coleman resigned on 6 November and was replaced by Peter Brotherton on 28 November.

Following the restatement of the company’s finances at the end of last year, Redcentric chief executive said: “The past few weeks have obviously been very challenging. Through that time though, the company has continued to deliver excellent services and support for its clients. I would like to thank our Redcentric team for their hard work and dedication toward that work.

“Our priority now is to take the necessary actions required to strengthen the business. With the opportunities ahead in our market – reflected by the strong sales pipeline and 38 client wins in the period – we are focused on taking a stronger, sustainable business forward.”

The FRC said that the investigation will “consider, but not be restricted to, issues regarding misstated accounting balances”.

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