PwC and EY Face Hefty Fines for Audit Failures in LCF Scandal

The Financial Reporting Council imposed multimillion-pound penalties on major accountancy firms for inadequate scrutiny in the London Capital & Finance audits.

PwC and EY were fined a combined total of £9.3 million for failing to properly audit the now-defunct mini-bond firm, impacting thousands of investors.
The FRC highlighted a lack of understanding of LCF's business model and insufficient application of professional skepticism during the audits.
LCF's collapse in 2019 led to significant financial losses for nearly 12,000 investors, prompting regulatory changes and ongoing criminal investigations.
The penalties, reduced after admissions of failure, mark some of the largest ever imposed by the FRC on individual audit firms.
Both firms have acknowledged their shortcomings in the LCF audits and committed to overhauling their audit processes to prevent future breaches.