A disciplinary case against Mazars UK (Mazars) and Richard Karmel, a partner of the firm, has resulted in both defendants admitting their conduct "fell significantly short" of standards reasonably expected of a member firm and member, according to the UK Financial Reporting Council (FRC).
A formal complaint was lodged by the FRC in relation to the advice provided by Mazars UK and Karmel’s to the Trustee of the First Quench Pension Fund in relation to a proposed replacement of First Quench Retailing Limited as the sponsoring employer.
A settlement between executive counsel to the FRC Gareth Rees QC, Mazars UK and Karmel was approved by the FRC tribunal on 25 July. It imposed a £750,000 ($1,242,488) fine for Mazars UK, as well as a £1,120,000 fee to cover costs incurred by executive counsel.
Karmel was also fined £50,000, as well as having to pay £80,000 in counsel fees.
Both parties also received a "severe reprimand".
FRC executive director of conduct Paul George said: "This outcome sends a clear message to all accountants and accountancy firms carrying out advisory work that not only do they have a responsibility to carry out their professional work diligently and in accordance with the applicable technical standards but that they must consider the different and opposing commercial interests of all those involved."
He added: "Accountants must not allow undue influence of others to override their professional judgements and they must have a clear understanding of who their client actually is. The result in this case demonstrates our commitment to ensure the standards of the profession are upheld so that it can justifiably secure public confidence."