PwC fined £5m over Galliford Try and Kier groups

PwC will pay a fine of £5.5m to the UK accounting regulator over its audits of Galliford Try and Kier, two of the country’s largest construction contractors.

The Financial Reporting Council launched the probes in relation to audits carried out for both contractors during the last four years.

The penalties were reduced from £5.5m and £3.5m respectively in recognition of PwC’s cooperation.

The FRC probe of PwC’s auditing of Galliford Try and Salford-headquartered Kier includes the accounting treatment of long-term contracts and revenue recognition,

Claudia Mortimore, Deputy Executive Counsel said: “The breaches in both Decision Notices concern failures to properly audit revenue recognised under specific complex long-term contracts.

“A non-financial sanction imposed under the first Decision Notice requires PwC to conduct reviews of its audit work in recent audit engagements of listed companies, where long-term contracts are prevalent, including a review of the efficacy of initiatives introduced to seek to improve the quality of audit work in this area.

“PwC will report the results to the FRC over two years.”

Jonathan Hook, the partner who led the audits of both companies, was given two fines totalling more than £135,000.

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