UK accounting watchdog extends probe into Babcock audits

LONDON (Reuters) – Britain’s accounting watchdog said on Monday it has broadened its investigation into the audits of British defence company Babcock International Group by PwC.

The Financial Reporting Council said it was investigating PwC’s audits for Babcock for the years ended March 31 2019 and 2020.

The decision was made last month following public announcements regarding the outcome of the contract profitability and balance sheet review commissioned by Babcock, the FRC said.

“The FRC has an ongoing investigation into aspects of the statutory audits by PwC of the consolidated financial statements of Babcock for the years ended 31 March 2017 and 31 March 2018. That investigation followed the outcome of an audit quality review,” the FRC said in a statement.

PwC said it will cooperate fully with the FRC in its enquiries and that audit quality is of paramount importance. Babcock declined to comment.

“The FRC’s annual reviews of our audit work, policies and procedures show a continued trend of improvement in our work and we use their insights, together with our own reviews, to continuously improve how we deliver high quality audits,” PwC said in a statement.

(Reporting by Huw Jones; Editing by Emelia Sithole-Matarise)