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PwC fined record £1.4m in UK for audit misconduct

PricewaterhouseCoopers was reprimanded for actions taken when auditing the accounts of JP Morgan.

AN ACCOUNTANCY DISCIPLINARY tribunal in the UK has found that Pricewaterhousecoopers committed “very serious” misconduct while auditing the books of JP Morgan bank and has fined the firm £1.4 million.

The record fine was handed down by the Accountancy and Actuarial Discipline Board (AADB) today following a hearing against the Big Four company.

The Executive Counsel of the disciplinary board filed complaints against PwC in relation to how it reported JP Morgan’s compliance to the regulators.

PwC said they had failed to ensure JP Morgan Securities held client money separate from the firm’s money at all times.

According to the AADB, PwC accepted that its conduct had, in relation to the reports it prepared and submitted to the FSA between 2002 and 2008, “fallen short of the standards reasonably to be expected”.

“The Tribunal found the misconduct in this case to be “very serious” and therefore imposed a severe reprimand on PwC,” a statement from the board read.

However, the fine could have been worse as it was reduced from £2 million because of the company’s “cooperation and other mitigation”.

JP Morgan itself was fined £33.3 million in 2010 by the FSA for mixing clients’ money with its own. Subsequently this action was taken against PwC for failing to notice the practice and telling the regulator that the bank had been compliant.

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