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News October 2015 Formal Complaints against Mr Stephen Harrison and PwC, and Mr Stephen Hill and David Wells relating

Formal Complaints against Mr Stephen Harrison and PwC, and Mr Stephen Hill and David Wells relating to Connaught plc

12 October 2015

PN 57/15

The Financial Reporting Council’s Executive Counsel has delivered two disciplinary Formal Complaints in connection with the conduct of:
 

  • Stephen Harrison (PwC’s Senior Statutory Auditor and Audit Engagement Partner) and PwC in relation to the audit of the financial statements of Connaught plc and its subsidiaries for the year ended 31st August 2009.

 
The Complaint alleges that Stephen Harrison and PwC failed to act with competence and due care in relation to the audit of the financial statements for the Group, Connaught Partnership Limited (“CPL”) and Connaught Compliance Limited (“CCL”), and that their conduct fell significantly short of the standards reasonably to be expected of a member or member firm of the ICAEW.  
 

  • Stephen Hill (Connaught’s Group Financial Director) and David Wells (Deputy Financial Director responsible for the Group’s treasury management) in relation to the preparation and approval of Connaught’s interim financial statements for the six months ended 28th February 2010.

 
The Complaint alleges that Stephen Hill and David Wells breached the fundamental principle of integrity in relation to the accounting treatment of a short term loan provided by a related party shortly before the half year end, and that their conduct fell significantly short of the standards reasonably to be expected of members of the ICAEW.
 
All Respondents are members (or in the case of PwC, a member firm) of the ICAEW. 
 
 
Notes to editors:

1.    The FRC is responsible for promoting high quality corporate governance and reporting to foster investment.  We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work.  We represent UK interests in international standard-setting.  We also monitor and take action to promote the quality of corporate reporting and auditing.  We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.
 
2.    In relation to disciplinary matters, the FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issues affecting the public interest. In brief, the stages of the disciplinary process are:

  • Decision to investigate

  • Investigation

  • Decision whether to bring disciplinary proceedings against Member Firm or Member and, if so decided, referral to Disciplinary Tribunal

  • Tribunal hearing

  • Determination and imposition of sanction and/or costs orders

The FRC can start a disciplinary investigation in one of two ways: (i) the professional bodies can refer cases to the FRC; and (ii) the FRC may decide of its own accord to investigate a matter. The Conduct Committee will consider each case identified or referred to it and decide whether or not the criteria for an investigation are met.
 
Investigations are conducted by Executive Counsel and the Professional Discipline team within the Conduct Division. If disciplinary proceedings are commenced, Executive Counsel delivers a complaint to the Conduct Committee. The Conduct Committee then instructs the Convener to appoint a Disciplinary Tribunal.​

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