Disciplinary arm of FRC announces an investigation into members of PwC that conducted audit work of struggling firm RSM Tenon
THE FRC’S DISCIPLINARY ARM has launched an investigation into the conduct of PwC as auditors of RSM Tenon.
Listed firm RSM Tenon restated its accounts earlier this year after errors were discovered, which saw the firm report a drop in revenue of 9% to £107.8m and overall profit fall to £683,000 from £7.5m.
Earlier this year The Times reported RSM Tenon’s lawyers claimed there were “serious concerns” around the quality of PwC’s audit work.
However, PwC claimed Tenon had misled the audit firm during its work, and had flagged up to RSM Tenon’s audit committee accounting issues.
The FRC’s disciplinary arm, AADB, decided to initiate an investigation following a consultation with the ICAEW.
It will look at the conduct of certain members of the ICAEW and PwC as auditors of RSM Tenon.
Although the AADB declined to comment on specific individuals, Accountancy Age understands the investigation will also encompass members of RSM Tenon.
The investigation will also look at the prepartion of financial information relating to RSM Tenon’s admission onto the stock market and its aquisition of RSM Bentley Jennison.
While an investigation is underway the AADB will not release details of individuals, it is only at the point of the executive counsel taking the case to tribunal that they will publish names.
A statement from RSM Tenon said the firm: “Notes that the Accountancy and Actuarial Discipline Board (“AADB”) has decided to investigate the conduct of members and member firms of the Institute of Chartered Accountants in England and Wales in connection with aspects of the preparation of RSM Tenon’s financial information in respect of 2010 and 2011
“RSM Tenon will fully co-operate with the AADB and their investigation.”
The investigation will cover: the preparation, approval, audit and financial statements of RSM Tenon and subsidiary companies for the years ended 30 June 2010 and 2011; the preparation, approval and review of financial information in connection with RSM Tenon’s admission onto the London Stock Exchange; and the acquisition of RSM Bentley Jennison.
A statement from PwC said: “We will be cooperating fully with the AADB investigation. We will be vigorously defending our audits and other work carried out for the RSM Tenon Group.”