Britain’s Financial Reporting Council (FRC) imposed a penalty of £906,250 on Deloitte LLP over its audits of building materials supplier SIG plc for the 2015 and 2016 financial years.
The penalty was reduced from £1.25 million after the auditing firm admitted breaches over its work on SIG’s financial statements.
It also fined Deloitte audit engagement partner Simon Manning £50,000, reduced to £36,250 after he also admitted the breaches.
The FRC said that Deloitte and Manning admitted two breaches concerning the audit of supplier rebates – incentives paid to SIG by its suppliers – and cash.
They failed to obtain and document audit evidence over the testing of rebate terms and the testing of rebate debtor balances. The FRC added that they also failed to “exercise sufficient professional skepticism” by not investigating signs that the balances of rebate debtors may have been overstated.
