Audit firm Deloitte and a former partner have been fined by the U.K. Financial Reporting Council for breaches related to the audit of an unnamed U.K. defined benefit plan.
The FRC said Friday it had sanctioned the firm with a £362,500 ($470,000) fine for breaches during the year ended Jan 2, 2016. The original fine had been £500,000 but was discounted due to admissions and early settlement.
The firm failed to obtain sufficient audit evidence to substantiate the cash holding of the DB plan, the FRC said. The firm also failed to get audit evidence of stress testing of the company's impairment model, the FRC added.
Deloitte was also given a non-financial sanction requiring it to prepare a progress report for the consideration of the FRC's audit quality review team.
Separately, a reprimand — a disciplinary notice — was imposed against the former Deloitte's partner, who was also unnamed.
Deloitte will also pay the FRC executive counsel's costs of the investigation.
"The proportionate sanctions reflect the failures by the respondents to obtain sufficient appropriate audit evidence and to properly document work in significant areas of audit risk, but also recognize the limited nature of the breaches, which did not call into question the truth or fairness of the financial statements," Claudia Mortimore, deputy executive counsel to the FRC, said in a news release Friday.
A Deloitte spokesman said in response to the sanctions: "We acknowledge and regret that aspects of our audit work for this entity did not comply with the relevant standards. However, as the FRC has recognized, these did not call into question the truth or fairness of the financial statements in question. Audit quality remains our priority and we continue to enhance our audit quality processes and to seek improvement across all of our work."