MPs call for scrutiny of PwC auditing of Philip Green's retail empire

MPs have called on the accountancy regulator to consider investigating PricewaterhouseCoopers’ auditing of Sir Philip Green’s wider retail empire, after the firm was hit with a record fine over the handling of BHS under his ownership.

The Financial Reporting Council confirmed late on Tuesday that PwC had been handed a record £6.5m fine, reduced from £10m after it agreed to settle and admitted misconduct.

Steve Denison, one of the firm’s senior accountants who audited BHS’s accounts ahead of its sale for £1 a year before the department store chain collapsed, is separately facing a 15-year ban and record personal fine of £325,000 from the industry watchdog. The fine was reduced from £500,000 after Denison admitted misconduct.

The Commons work and pensions committee, which carried out an investigation into the demise of the department store in 2016, is pressing the FRC on whether further investigation and wider sanctions are called for.

It has asked whether the FRC will investigate PwC’s audit of the accounts of Taveta, the Sir Philip Green-led former parent company of BHS that sold the department store to the former bankrupt Dominic Chappell in 2015.

Taveta controls Arcadia Group, which includes Topshop, Dorothy Perkins and Burton.

Frank Field MP, the chair of the committee, said of the FRC’s sanctions of PwC and Denison: “This is undoubtedly a good first move. It reopens the key question of whether BHS was in fact a ‘going concern’ when it was jettisoned for £1. For that, the company directors as well as the auditors are on the hook.”

The committee has also asked for further details of the misconduct of PwC and Denison that earned them the fines, and of whether there was a conflict of interest in the advisory firm auditing the accounts of BHS and the parent company that was trying to offload it.

The regulator said that in addition to the financial sanctions and a “severe reprimand” it has asked PwC to monitor its Leeds-based audit practice and provide detailed reports to the FRC for the next three years, while ensuring that all audits of high-risk non-listed companies or high-profile companies are reviewed for quality.