Quindell’s auditor has been fined after admitting to misconduct
The Financial Reporting Council (FRC) has fined Quindell’s auditor £700,000.
Audit firm Arrandco Audit (previously known as Tenon) was slapped with a £1m fine, which was adjusted to £700,000 for mitigating factors. It will have to pay £90,000 towards executive counsel’s costs.
In addition, audit engagement partner and statutory audit partner Jeremy Filley was fined £80,000, which was discounted to £56,000.
Both parties admitted to misconduct over the audit of Quindell’s financial statements.
Tenon and Filley’s conduct “fell significantly short of the standards reasonably to be expected”, according to the FRC.
The acts of misconduct were in relation to two elements of the audits. The FRC said their failings included: “failure to obtain reasonable assurance that the financial statements as a whole were free from material misstatement, failure to obtain sufficient appropriate audit evidence and failure to exercise sufficient professional scepticism.”
The accounting treatment of the reverse acquisition of Mission Capital and a number of transactions Quindell and TMC (Southern) entered into in 2011, were the subject of prior year adjustments in Quindell’s financial statements for the year ending December 2014.
The Serious Fraud Office’s (SFO) investigation into Quindell’s, which is now called Watchstone, 2013 and 2014 accounts is ongoing.
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