FRC closes investigation into PwC over Barclays compliance

The Financial Reporting Council (FRC) has closed a three-year long investigation into PwC’s work as auditor for Barclays.

The accountancy watchdog said the investigation was dropped as there was not a “realistic prospect that a tribunal would make an adverse finding against PwC” in relation to the matters within the scope of the investigation.

The FRC launched a probe into PwC’s role in reporting on Barclays’ compliance with FSA’s client asset rules for the years ended 31 December 2007 to 31 December 2011. The investigation was sparked by revelations that the bank endangered £16.5bn of client funds by failing to keep it separate from its own money. This resulted in an at the time record fine of £37.7m in 2014 for the bank.

PwC responded: “We co-operated fully ​during the FRC​’s​ thorough ​investigation and are pleased that​ ​the FRC has closed it without any further action.”

In 2013 the FRC closed a separate investigation into PwC’s conduct as auditors of Barclays in relation to the preparation of reports to the FSA.

PwC acted as Barclays’ auditor for 120 years until 2016, when KPMG took over.

This follows news that the FRC dropped an investigation into KPMG’s audits of HBOS.

The FRC also dropped an investigation into PwC’s audits of Tesco earlier this year, making this the third high profile investigation into a Big Four firm to be dropped by the FRC.