PwC fined for Babcock audit failings including creating false record

PwC says: ‘We’re sorry that the work in question was not of the standard required and that we demand of ourselves.’ Photograph: Rafael Henrique/SOPA Images/Rex/Shutterstock

The consultancy group PwC has been hit with a £7.5m fine over a string of serious breaches while auditing the engineering company Babcock’s accounts, including creating a false record of documents reviewed for a sensitive government contract.

The accounting regulator, the Financial Reporting Council, said breaches were found in “every area” it had investigated in relation to the audit of Babcock’s accounts for 2017 and 2018, with PwC repeatedly failing to either challenge management, gather sufficient evidence to confirm financial statements, or follow basic audit requirements.