Accountancy firm Crowe UK has been hit with sanctions by the watchdog over its audit of London-listed Aseana Properties.
The Financial Reporting Council (FRC) has concluded that Crowe failed to comply with the regulatory framework when it audited the company’s financial statements for the year ended 31 December 2019.
The regulator found failures in the reviewed audit, which it considered had been unsatisfactory and, overall, poor quality.
The most significant failing was in regards to the carrying value of inventory, but the committee identified other areas of concern in respect of the assessment of fraud risk and by engagement quality control reviewers oversight.
The FRC has imposed a financial sanction on Crowe UK to the sum of £180,000, which was adjusted by a discount of 20 per cent to £144,000 for co-operation from the firm.
Additionally to the fine, the firm proposed undertakings to be monitored by the FRC’s Audit Quality Review team, which the regulator accepted.
In its notice, the regulator did highlight that Crowe provided co-operation, including at an early stage, and took appropriate remedial steps once the failings were identified.
A spokesperson for Crowe UK said: “We are pleased the matter has been settled. We have continued to develop our audit methodology and guidance in the four years since the work was carried out and to make significant investment in our audit business. Audit quality and its continuous improvement remain a key priority for the firm.”
The regulator has been actively handing out hefty fines over audit failures. It was reported that the FRC levied record-level fines against auditors over 2022/23 after it promised to become more “forceful” after it was heavily criticised for the slow pace of its investigations.
Back in March Big Four firm KPMG hit with a £1.4m fine over its audit of advertising agency M&C Saatchi, while in April, Grant Thornton was fined £40,000 over its auditing for a local authority’s pension fund.