Accountancy and Actuarial Discipline Board to Probe PwC’s Role in Connaught Downfall
The accounting regulator in UK, Accountancy and Actuarial Discipline Board (AADB), seeks to conduct an investigation into the conduct of auditors from PricewaterhouseCoopers and other accountants which had audited the accounts of housing repair specialist Connaught.
The AADB has the power to deal out fines for any misconduct committed in the auditing industry. It said it would investigate the role of auditors PwC and of the rest of the accountants who are necessarily linked with the 2009 accounts of Connaught and the interim figures from earlier in 2010.
Connaught declared losses in jobs reaching up to 1,000 when it turned to the administration in September.
The accounting regulator will look into the issue of “mobilization costs,” incurred when the contract began. The AADB believed that Connaught has a very “aggressive accounting method” when it dealt with the costs.
The names of the other accountants being investigated regarding the issue other than PwC might take some time before becoming known to the public as AADB refused to release comments at the moment. PwC’s omission to audit Connaught’s interim figures is likely to result in an extended inquiry into the issue.
Stephen Hill, a chartered accountant, served as Connaught’s finance director from 2006 until the downfall of the firm. Reports also said Stephen Harrison served as one of the audit partners auditing Connaught’s accounts in 2009. He retired in summer.
PwC said it would cooperate completely with the investigation to be conducted by the AADB, but refused to give its statements regarding the issue.
On September, Connaught has appointed KPMG as administrators after the firm found itself in hot water from its financial disclosures.