PwC Fined £15 Million for Audit Failures

PricewaterhouseCoopers (PwC) has been fined £15 million (approximately $19.5 million) by the UK's Financial Conduct Authority (FCA) for failing to report suspicions of fraud during its audit of London Capital & Finance (LCF), marking the first penalty against an auditing firm by the FCA. The FCA's investigation revealed that PwC encountered significant difficulties during the 2016 audit, including misleading information from LCF executives, which raised red flags about potential fraudulent activities. Despite these concerns, PwC did not promptly report its suspicions as required by law, leading to the financial collapse of LCF in January 2019 and significant losses for over 11,600 investors. The audit firm had confirmed the accuracy of LCF's accounts at the time, but its failure to act on earlier warnings has drawn criticism and prompted a Serious Fraud Office investigation into the matter. Meanwhile, PwC is also facing scrutiny in China over its auditing work for China Evergrande amid allegations of collusion in financial fraud, which may result in further penalties. The ongoing issues have led to a loss of major clients for PwC in China as the firm grapples with its tarnished reputation.