PwC fined £5.1m over RSM Tenon audit

Advice arm was sold to Baker Tilly and then Towry following “extensive misconduct” by PwC in audit of professional services firm

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PricewaterhouseCoopers has been fined £5.1m by the Financial Reporting Council over its audit of RSM Tenon ahead of the professional services firm going into administration.

Baker Tilly acquired RSM Tenon out of administration in 2013, including its advice arm RSM Tenon Financial Management. Towry then acquired the advice arm from Baker Tilly a year later, in a deal first revealed by Fund Strategy’s sister title Money Marketing.

The FRC has fined PwC after finding “extensive misconduct” in the way the firm carried out the audit of RSM Tenon’s 2011 accounts.

Senior auditor Nicholas Boden has also been fined £114,750.

The FRC says: “PwC and Mr Boden have admitted their conduct fell significantly short of the standards reasonably to be expected.

“The admitted acts of misconduct include failures to obtain sufficient appropriate audit evidence and failures to exercise sufficient professional scepticism.”

PwC also has to pay £500,000 towards the FRC’s legal costs.

Proceedings against ex-RSM Tenon finance director Russell McBurnie are still ongoing.