Accountant PwC has been hit with a £5m fine for misconduct regarding the audit of collapsed housing maintenance contractor Connaught.
Connaught fell into administration in 2010, with a mountain of debts totalling £200m and 50,000 unpaid invoices.
Connaught was one of the biggest construction corporate collapses of the post financial crisis period and sent shock waves through the industry.
Today the Financial Reporting Council severely reprimanded PwC and retired PwC audit partner Stephen Harrison who was handed a separate £150,000 fine.
The finding of misconduct followed a five-year investigation and 12-day hearing relating to the audit of 2009 full-year accounts, which failed to spot the problems in the business.
The independent tribunal found misconduct covering three key areas: company mobilisation costs, long term contracts and intangible costs.
PwC were also ordered to pay the Executive Counsel’s costs and to make an interim payment on account of £1.5m.
