PWC is fined £5.6m for failures in audit of Babcock

PWC has been fined £5.6m by the watchdog over its botched audit of defence contractor Babcock.

The Financial Reporting Council (FRC) found serious breaches by the Big Four firm in its audits of accounts for 2017 and 2018, including repeated failures to challenge management.

It is the latest penalty for PWC, which is also being investigated by the regulator for its audits of four other clients.

Claudia Mortimore, the FRC’S deputy executive counsel, said: “The quality of these audits fell far short of the standards expected of statutory auditors.

“Of particular concern is the lack of scepticism applied and the failures to follow some basic audit requirements.”