Arrandco Audit has been fined £1 million for misconduct in its handling of the accounts of insurance software firm Quindell.
The Financial Reporting Council (FRC) fined Arrandco, previously known as RSM Tenon Audit, over several failures, including to “exercise sufficient professional scepticism”. Audit engagement partner Jeremy Filley was also handed a fine of £80,000.
Quindell helped insurance companies with claims management and was once the highest valued stock on the AIM market.
But the company’s shares were suspended in 2015, amid a Financial Conduct Authority investigation into its accounts. A short selling campaign had questioned its financial stability.
Arrandco and Filley will pay £700,000 and £56,000 of their fines, respectively, due to mitigating factors and settlement discounts, for their misconduct in the audit of the financial statements of Quindell for the period ended 31 December 2011. Arrandco must also pay £90,000 in costs.
The FRC’s investigation into another firm over its audit of Quindell’s books is ongoing.
Quindell continues to trade as Watchstone and is the subject of a Serious Fraud Office investigation.