FRC to investigate PwC over BHS audit

FRC to investigate PwC over BHS audit

The Financial Reporting Council has launched an official investigation into PwC’s audit of BHS for the 2013/14 tax year, after a preliminary inquiry found grounds for suspicion of misconduct.

A statement from the FRC did not give details of exactly what aspects of the audit it would be reviewing. But a spokesperson said if the investigation found evidence of misconduct the case would then go to a tribunal.

He said there was “no set time” for the investigation, saying its length depended on “external cooperation”.

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The FRC investigation will overlap with a Work and Pensions select committee investigation into the collapse of BHS and the resulting takeover of the company’s pension scheme by the Pension Protection Fund.

On 15 June BHS former owner Sir Philip Green told the select committee said he did not know the scheme was in deficit until 2012, twelve years after he bought the company. However, he promised pension members he would “sort” the problem.

The Pensions Regulator’s chief executive Lesley Titcomb is due to make her second appearance before the committee tomorrow (28 June).

The FRC spokesperson said the investigation was not a result of the select committee’s findings, saying it would have happened regardless.

He said he could give no details of what the FRC was looking at in PwC’s audit because it could prejudice the investigations.

Announcing the investigation, the FRC statement said simply that it had “launched an investigation under the Accountancy Scheme into the conduct of PricewaterhouseCoopers LLP in relation to the audit of the financial statements of BHS Limited for the year ended 30 August 2014.”

FTAdviser contacted PwC for comment. At time of publication they had not responded.