Deloitte fined $5.4M over Serco Group audit failings
Deloitte LLP was fined 4.3 million pounds ($5.4 million) for its failure to properly audit the accounts of a unit of Serco Group Plc in the latest case of a Big Four firm being sanctioned for its accounting shortcomings.
Deloitte will also pay 300,000 pounds toward the costs of the investigation and has arranged to send all its audit staff on training program to improve behavior related to its “misconduct,” the U.K.’s Financial Reporting Council said.
Deloitte and audit engagement partner Helen George, who was fined 97,500 pounds, “failed to act in accordance with the fundamental principle of professional competence and due care,” the FRC said in a statement Thursday. The fines for Deloitte and George were both were reduced after their admission of misconduct.
Serco Group Plc agreed to pay 19.2 million pounds this week to settle a six-year fraud probe into false accounting, that dates back to 2013 when U.K. regulators began looking into how its Serco Geografix unit overcharged for electronic tagging services of criminals, including some who had died.
Deloitte’s fine comes just weeks after PricewaterhouseCoopers was fined 4.55 million pounds over its failings in its handling of technology firm Redcentric Plc. The accumulating fines have fueled scrutiny of the dominance of Big Four, which also include KPMG and EY, and has led the Competition and Markets Authority to call for a split of their operations amid allegations of conflicts of interest