FRC imposes sanctions against BDO LLP and two audit engagement partners

News types: Investigations

Published: 6 November 2025

The Financial Reporting Council (FRC) has imposed sanctions under the Accountancy Scheme against BDO LLP (BDO) and two former audit engagement partners, Mr John Everingham and Mr Kevin Cook (together, the Respondents), following their admissions of Misconduct.[1]

This follows the delivery of Formal Complaints against each of the Respondents in April 2025 subsequent to an investigation into their conduct in circumstances where a Senior Manager was able to pursue, undetected, a dishonest course of conduct on numerous audits between 2015 and 2019, which included: creating false audit evidence, causing auditor’s reports to be issued without approval from the relevant audit engagement partner, and inserting electronic copies of the audit engagement partners’ signatures in auditor’s reports without their approval.  The outcome of the investigation into the Senior Manager, which provides further details of their Misconduct and the sanctions imposed, was published in November 2024.[2]

The Misconduct set out in the admitted Formal Complaints against the Respondents relates to the following matters:

  • BDO’s inadequate response to internal reports which raised or should have raised concerns as to the Senior Manager’s honesty and integrity;[3]
  • Deficiencies in BDO’s systems and controls for ensuring adequate audit supervision by engagement partners, and audit quality in the period 2012-2019;[4]
  • The failure of Mr Everingham (in the period 2014-2019) and Mr Cook (in the period 2015-2019) to adequately supervise, monitor and oversee 21 and 13 audits respectively, on which the Senior Manager worked, which resulted in each case in an Auditor’s Report being issued without their authority and, in some cases, where inadequate, or no, audit evidence had been obtained;[5]
  • Mr Everingham’s issuance of 10 Auditor’s Reports (for financial years ending between 2015-2018) in relation to audits on which the Senior Manager worked, when insufficient audit evidence had been obtained and where it is inferred that he had carried out no, or very limited, review of such evidence (if any) as had been obtained;[6] and
  • BDO’s liability for the Misconduct of the Senior Manager, Mr Everingham and Mr Cook.

The FRC’s Executive Counsel has agreed the following terms of settlement with BDO, Mr Everingham and Mr Cook which have been approved by the independent Tribunal appointed to determine the Formal Complaints:


BDO 

  • A financial sanction of £6,500,000 reduced to £5,850,000 after application of a 10% settlement discount;
  • A requirement to take all reasonable steps to repay audit fees to entities in respect of audits where unauthorised auditors’ reports were issued by the firm (where the firm has not already done so);
  • A Severe Reprimand;
  • A report to be provided by BDO to the FRC every 6 months for a period of two years addressing the matters set out in the schedule to the Settlement Agreement; and
  • A sum of £716,000 to be paid in respect of the entirety of the FRC’s costs in this matter.[7]

John Everingham

  • A financial sanction of £200,000 increased by 5% to £210,000 to reflect non-cooperation with the investigation (by way of the provision of incomplete and inaccurate information to Executive Counsel) and then reduced to £189,000 after application of a 10% settlement discount;
  • A Severe Reprimand; and
  • A Condition that Mr Everingham does not perform any audit work (including, but not limited to, the signing of any auditor’s report expressing an opinion on a reporting entity’s financial statements) for a period of 6 years.

Kevin Cook

  • A financial sanction of £100,000 reduced to £90,000 after application of a 10% settlement discount;
  • A Severe Reprimand; and
  • A Condition that Mr Cook does not perform any audit work (including, but not limited to, the signing of any auditor’s report expressing an opinion on a reporting entity’s financial statements) for a period of 3 years.

Read the Settlement Agreement for BDO LLP and the Formal Complaint for BDO LLP.

Read the Settlement Agreement for John Everingham and the Formal Complaint for John Everingham.

Read the Settlement Agreement for Kevin Cook and the Formal Complaint for Kevin Cook.

Jamie Symington, Deputy Executive Counsel, said:

“This case has established that BDO did not have sufficiently robust systems and controls in place from 2012 to 2019 to ensure that audit engagement partners diligently conducted and supervised their audits. These failures gave rise to circumstances in which misconduct could occur and remain undetected. Mr Everingham and Mr Cook were responsible as audit engagement partners for the overall quality of the audits they supervised, and they both adopted a fundamentally flawed approach to this role which involved a serious abrogation of their responsibilities.

The failings admitted by BDO and the two partners enabled the Senior Manager’s dishonest course of conduct to go undetected over several years, thereby undermining the integrity and quality of numerous audits in the relevant period. Even when evidence of the Senior Manager’s misconduct did emerge, the firm failed to take the steps necessary to investigate it, and to protect their clients. The substantial sanctions imposed reflect the extent to which the serious failings established in this case will undermine confidence in audit and the accountancy profession.

We recognise that following the Senior Manager’s departure from BDO in December 2019, BDO conducted an extensive forensic investigation into the Senior Manager’s conduct over the course of the next 15 months and provided a detailed report on its findings to the FRC. BDO has since worked to remediate and strengthen relevant systems and controls. As part of this set of sanctions, BDO will report to the FRC for a period of two years on the efficacy of this work, including the control enhancements introduced specifically to prevent any repetition of the misconduct in this case”.

Footnotes

  1. [1]

    Misconduct is defined in the Accountancy Scheme as “as an act or omission or series of acts of omissions by a Member or Member Firm in the course of their professional activities…which falls significantly short of the standards reasonably expected of a Member or Member Firm or has brought or is likely to bring discredit to the Member or Member Firm or to the accountancy profession.”
  2. [2]

    https://www.frc.org.uk/news-and-events/news/2024/11/sanctions-against-amanda-nightingale-n%C3%A9e-cleaver/
  3. [3]

    Thereby giving rise to admitted breaches of the ICAEW Code’s fundamental principles of Professional Behaviour and Professional Competence and Due Care, and ISQC1 requirements,
  4. [4]

    Thereby giving rise to admitted breaches of ISQC1 requirements.
  5. [5]

    Thereby giving rise to admitted breaches of the ICAEW Code’s fundamental principles of Professional Behaviour and Professional Competence and Due Care, as well as requirements under the International Standards on Auditing (ISAs).
  6. [6]

    Thereby giving rise to admitted breaches of the ICAEW Code’s fundamental principles of Professional Behaviour and Professional Competence and Due Care, as well as requirements under the ISAs.
  7. [7]

    Save for a £10,000 contribution to costs made by the Senior Manager as part of their settlement with the FRC.

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