Arrandco Audit has been fined £1 million for misconduct in its handling of the accounts of insurance software firm Quindell.
The Financial Reporting Council (FRC) fined Arrandco, previously known as RSM Tenon Audit, for a number of incidents; including failure to “exercise sufficient professional scepticism” about Quindell’s financial position. An FRC investigation of another firm regarding its auditing of Quindell has still to be completed.
Quindell, which helped insurance companies with claims management, was once the highest-valued stock on the AIM market. But its shares were suspended in 2015, as the Financial Conduct Authority started investigating its accounts. It is currently the subject of a Serious Fraud Office investigation.
We have warned in the past that auditors must be thorough when it comes to looking for signs of any kind of wrongdoing in each and every company they examine. The FRC is taking an increasingly tough stance on failure to identify and report irregularities – and Arrandco has paid a large price for such failure.
Read our article: FRC INVESTIGATIONS