Accountancy giant PwC has admitted to mistakes made over its audit of JP Morgan Securities (JPMSL) for the 7 years to 31 December 2008.
According to the Accountancy and Actuarial Disciplinary Board (AADB), the ‘big four’ firm failed to report that JPMSL’s Futures and Options business did not segregate money from its clients, flouting rules set out by the Financial Services Authority (FSA).
It added that PwC lacked “due skill, care and diligence” and did not give “proper regard” to technical and professional standards.
The case has been referred to an independent panel, lead by a senior lawyer, who will decide on what sanctions to impose. A disciplinary hearing is likely to take place in late September or early October.
PwC’s decision to admit to its auditing failings was welcomed by AADB chief Cameron Scott, who said that firms “that accept mistakes can learn lessons from them.”
He added that companies accepting AADB decisions are “not normal, but very welcome”.