The FCA has fined PwC £15m for failing to report suspicions of fraud that arose during its 2016 audit into London Capital & Finance. As PwC had been carrying out the audit, it had been faced with aggression from a senior individual at LCF and had also been given inaccurate and misleading information. It also generally found the audit very complex. It forms a suspicion that LCF might have been involved in fraudulent activity. Although, ultimately, it satisfied itself that the accounts were accurate, if should still have reported its suspicions to the FCA as soon as possible after forming them. The FCA noted that this duty remained, even if the suspicions ultimately did not.
This is the first time the FCA has fined an audit firm. It said it had been deprived of potentially vital information because it was not made aware of the red flags.