PWC criticised by accountancy watchdog over BHS audit

THE accountancy watchdog has said Pwc’s reasons for rubber stamping BHS’S accounts as a “going concern”, days before it was sold for £1, were “obviously insufficient”.

The Financial Reporting Council (FRC) said, following an investigation, the executive council had concluded that “the assumptions behind the impairment review were not supported by evidence obtained by PWC and were not reasonable; and other deficiencies in Pwc’s work were apparent in relation to the audits of BHS and other companies in the Taveta group”.

It said “the basis of the going concern statement was obviously insufficient in the face of a pending sale”. BHS was sold by Sir Philip Green’s Taveta Group to Dominic Chappell for £1 in 2015, days after a PWC audit. The retailer collapsed in 2016.

The comments were made in court documents relating to Sir Philip’s attempt to seek a gagging order for the FRC’S formal report into its audits.

Sir Philip’s Taveta Investments holding company sought to block the report on the grounds that Taveta would be “adversely affected”. The judge said that although the threatened publication made criticisms of the Taveta personnel “such a threatened publication is not exceptional”.

The High Court yesterday ruled that it would not be granting an injunction.