The Financial Reporting Council (FRC) in the UK has imposed penalties on BDO LLP and two of its former audit partners, John Everingham and Kevin Cook, after both the firm and individuals admitted to “misconduct” linked to a series of audit shortcomings.
Following an investigation, formal complaints were filed against BDO, Everingham, and Cook in April 2025.
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The probe was triggered by findings that a senior manager at BDO committed dishonest activities across several audits between 2015 and 2019.
These acts included fabricating audit evidence, issuing audit reports without the necessary approval from the responsible engagement partner, and using electronic copies of partner signatures on reports without authorisation.
BDO’s internal controls and response mechanisms were found wanting, as the firm did not act on internal reports that could have revealed issues around the senior manager’s conduct.
The FRC also concluded that Everingham and Cook did not provide adequate oversight of audits in which the senior manager was involved. Between 2014 and 2019, Everingham failed to properly oversee 21 audits, while Cook neglected his supervisory duties on 13 audits between 2015 and 2019.
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By GlobalDataFurther findings show that Everingham signed off on ten audit reports relating to financial years from 2015 to 2018 without sufficient supporting documentation or adequate review.
Under the settlement approved by an independent tribunal, BDO must pay a financial penalty of £5.85m ($7.6m) after a settlement discount is applied, requiring the firm to reimburse audit fees for affected audits.
In addition, BDO received a severe reprimand and must file biannual reports to the FRC over the next two years detailing progress in addressing the identified issues, the FRC stated.
The firm will also pay £716,000 towards the FRC’s investigation costs.
John Everingham faces a fine of £189,000 following adjustments for non-cooperation and settlement. He is prohibited from carrying out any audit work for six years with a severe reprimand.
Kevin Cook received a £ 90,000 penalty after settlement discounting. He is subject to a severe reprimand, and also cannot perform audit work for three years.
FRC deputy executive counsel Jamie Symington said: “Even when evidence of the senior manager’s misconduct did emerge, the firm failed to take the steps necessary to investigate it, and to protect their clients.”
Symington added: “We recognise that following the senior manager’s departure from BDO in December 2019, BDO conducted an extensive forensic investigation into the senior manager’s conduct over the course of the next 15 months and provided a detailed report on its findings to the FRC. BDO has since worked to remediate and strengthen relevant systems and controls.”
