The top accountancy regulator is to investigate the auditing giant PricewaterhouseCoopers (PwC) over its role at RSM Tenon the much smaller accountant which this year found enormous "black holes" in its own accounts.
The Accountancy and Actuarial Discipline Board (AADB) is not only investigating PwC's "preparation approval and audit" of Tennon's accounts for the full years to June 2010 and 2011 but also its involvement in the firm's move from AIM to the main market in 2010 and the £76m takeover of RSM Bentley Jennison in 2009.
Tenon issued a profits warning in January and in February said it lost £70.6m in the six months to December 2011 and knocked £12m off the previous year's profits for accounting errors.
The AADB has powers ranging from fines to public censure of firms and individuals. Earlier this year it imposed its largest-ever fine of £1.4m on PwC for failing to spot that millions of dollars clients' money had not been properly ring-fenced from the bank's own funds at JP Morgan.
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