PwC Fined $4.4M for Audit Failures in UK, Citing Lack of Professional Skepticism

PwC has been fined approximately $4.4 million by the UK's Financial Reporting Council (FRC) for significant auditing missteps related to British defense contractor Babcock International Group. The FRC found that PwC and its engagement partner, John Waters, failed to exercise adequate professional skepticism and obtain sufficient audit evidence in the 2019 and 2020 fiscal year audits. These breaches included issues with cash pooling, financial arrangements for an overseas contract, and goodwill impairment assessments.