By Huw Jones
LONDON (Reuters) – Britain’s accounting watchdog said on Wednesday it had found “instances of cheating” in exams for professional qualifications and that it may punish audit firms or industry bodies.
The Financial Reporting Council, which has powers to fine audit firms, said through its review in July of controls to stop cheating it had “become aware of instances of cheating”.
These included instances acted upon by the FRC’s U.S. counterpart, the PCAOB, which sanctioned KPMG in September 2021.
The FRC examined KPMG, EY, Deloitte and PwC, the “Big Four” auditors, along with BDO, Mazars and Grant Thornton and six professional bodies with a role in granting qualifications.
“The issues raised by exam cheating therefore remain live and the FRC’s consideration of them, and any further regulatory action needed in response to them, is ongoing,” the FRC said.
EY was sanctioned in the United States in June, with PwC sanctioned in Canada in February.
The FRC said that information received so far does not point to “systemic” cheating, but improvements were needed to how exams and course work are assessed and invigilated.
A number of the cheating instances related to projects apprenticeship accountants must submit to professional bodies, alongside their professional qualification.
The FRC said in a statement it was looking at how to strengthen the “integrity” of assessing these projects to prevent and detect cheating.
“The FRC will continue to act to hold firms to account for any shortcomings that might be identified,” it added.
(Reporting by Huw Jones; Editing by Alexander Smith)
