PracticeAccounting FirmsPKF fined £75,000 over audit

PKF fined £75,000 over audit

ICAEW Investigation Committe orders PKF to pay £75,000 fine and costs of £27,000 over audit

PKF has received a consent order from the ICAEW Investigation Committee to
pay a £75,000 fine and £27,000 in costs following its audit opinions on an
unnamed company in 2000 and 2001.

In its latest list of disciplinary orders and regulatory decisions the ICAEW
said that the Investigation Committee had made an order for the fines and the
costs. The committee said PKF should also be ‘severely reprimanded’ for the
audit.

The papers say that in issuing two unqualified audits on the company in March
2000 and March 2001, PKF had ‘failed to obtain sufficient knowledge’ of the
workings of how subsidiaries of the company were operated and what impact
transactions at these subsidiaries would have on the financial statements.

The papers also said PKF had ‘failed to plan and perform the audit of the
group to obtain reasonable assurance that the group financial statements were
free from material misstatement’.

Finally, the audit failed to obtain ‘sufficient competent evidential matter’
with respect to revenues, cost of revenues and intangible assets at the
company’s subsidiaries.

Responding to the fine and costs, PKF said that since 2001, the ‘regulatory
environment’ had changed significantly and that PKF, along with the rest of the
audit industry, had ‘strengthened’ its audit processes.

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