FRC’s Enforcement Committee has determined that Mazars failed to comply with the regulatory framework for auditing in its audit of a Market Traded Company’s financial statements.
The committee found that there were wide-ranging failings in respect of the audit. The most significant failing was the incorrect classification of convertible loan notes, resulting in a material misstatement which was not identified by Mazars until after the audit was completed and demonstrated a lack of quality control. Other areas of concern included the way in which bonus payments were addressed.
The committee considered that it was necessary to impose a sanction to ensure that Mazars’ audit work is undertaken, supervised, and managed effectively. A regulatory penalty of £90,000 was issued, adjusted by a discount of 20% for co-operation and certain admissions to £72,000.
