The Financial Conduct Authority (FCA) said that PwC, one of the so-called big four accounting firms, had overlooked several audit red flags and had delayed reporting possible wrongdoing at a bankrupt financial services company.
A senior employee of LCF “acted aggressively” toward auditors, and PwC experienced “significant issues” during the audit process due to false and misleading information provided by LCF, according to the FCA.
However, PwC approved the accounts even though they had reason to believe LCF was engaging in fraud and were required to alert the regulator of their suspicions.
Even after PwC was persuaded that LCF’s 2016 financial statements were true.
The FCA stated that PwC ought to have “acted immediately” in its place. “Their failure to do so deprived the FCA of potentially vital information.”
Which business is PwC accused of fraud?
Former investors of LCF have called it a Ponzi scheme. The financial watchdog has also denounced it for its “unfair and misleading” advertising of minibonds, a financial instrument.
After the FCA ordered it to delete such promotions in 2019, the company went into administration.
