Accountancy watchdog probing PwC's audit of BT after Italian scandal
Britain's accountancy watchdog has opened an investigation into PwC's audit of BT following the telecoms giant's Italian accounting scandal.
The Financial Reporting Council (FRC) said on Thursday it has commenced an investigation under the Audit Enforcement Procedure into audits of BT undertaken by PwC from 2015 to 2017.
"The decision to investigate follows announcements by BT in relation to accounting issues in its Italian operations," the FRC said.
The move comes after the scandal at the firm's Italian division, BT Italia, resulted in the firm booking a £530 million writedown.
Shares plummeted 19% when BT revealed details of the scandal in January, wiping £8 billion off its stock market value.
BT boss Gavin Patterson was stripped of his bonus following the debacle, with his total pay packet cut from £5.3 million to £1.3 million.
Earlier this month, BT appointed KPMG as its new auditor, ending a 30-year relationship with PwC.
PwC said in a statement: "We will continue to co-operate fully with the FRC in its inquiries. The regulator has a duty to investigate where they believe there is a public interest, in order to give confidence to the financial markets.
"Audit quality is of paramount importance to the firm. The FRC's annual reviews of our audit work, policies and procedures show a continued trend of improvement in our work and we use the FRC's insights, together with our own reviews, to continuously improve how we deliver high-quality audits."