Congrats to BDO for getting its first-ever fine from the U.K.’s Financial Reporting Council for committing an auditing boner. Now BDO can say it finally has something in common with the Big 4.
The Financial Times reported today:
Accountancy firm BDO has received its first UK audit fine from the industry’s regulator for rule breaches in its work on the accounts of international insurer AmTrust Europe.
The Financial Reporting Council said that the UK’s fifth-largest accounting firm failed to meet a number of technical standards during its 2014 and 2015 audits of AmTrust because it did not sufficiently examine the work of third-party actuarial experts on the company’s accounts.
BDO also failed to sufficiently test management’s accounting estimates regarding AmTrust’s provision for insurance claims, the FRC said on Wednesday.
BDO partner David Roberts, who signed off on the 2014 and 2015 audit reports, got reprimanded because he and the firm “relied on the opinions of independent expert actuaries without taking sufficient steps to gain an understanding of or to evaluate their work,” Jamie Symington, deputy executive counsel to the FRC, said in a statement.
BDO was fined £200,000, but the FRC reduced it to £160,000 because of how sweet and innocent BDO was before it admitted to doing something naughty. In addition, BDO was told to conduct a review of the quality of its work on evaluating findings commissioned from independent actuaries, according to FT.
Roberts did not receive a fine or any type of sanction.
We hope your first time was as good for you, BDO, as it was for the FRC.
BDO fined by UK audit watchdog for first time [Financial Times]
Nearly two years after Texas financier Allen Stanford was indicted in an alleged massive Ponzi scheme, investors have just filed a $10 billion proposed class action suit against his auditor—the giant accounting firm BDO.