Deloitte has been fined over £900,000 by the UK watchdog for failings in its auditing of building materials supplier SIG’s financial statements between 2015 and 2016.
Simon Manning, Deloitte’s engagement partner was also sanctioned.
“Deloitte and Mr Manning failed to obtain and document sufficient appropriate audit evidence,” outlined the Financial Reporting Council (FRC), which imposed the fine.
Both also “failed to exercise sufficient professional scepticism by failing to investigate indications” related to cheque payments, it added.
Deloitte and Manning each admitted to two breaches made in the auditing process.
Deloitte, one of the big four accountancy firms, had faced a £1.25mln fine but had this discounted due to its cooperation with the FRC.
Manning’s fine was also reduced, dropping from £50,000 to £36,250.
FRC deputy executive counsel Jamie Symington said: “These breaches concerned two discrete areas of the audit of a particular subsidiary of SIG PLC (LSE:SHI).
“They involved contraventions of requirements which are fundamental to the role of the independent auditor and were associated with material misstatements in SIG plc’s accounts which had to be corrected.
“The breaches in respect of supplier rebates were made all the more serious by the fact that the FRC had highlighted these complex supplier arrangements as requiring particular attention from auditors.”
In 2021, the FRC imposed sanctions worth £46.5mln, a record figure, up £16.7mln from 2020.