The UK’s Financial Reporting Council (FRC) has taken disciplinary action against Baker Tilly UK Audit, now part of RSM UK, and its partners, Richard King and Steven Railton, for misconduct during its audits of financial statements of electric vehicle manufacturer Tanfield Group and two of its subsidiaries.
Baker Tilly, King and Railton were reprimanded and fined £750,000, ($983,737) £30,000, and £35,000 respectively.
An independent tribunal made findings of misconduct for the year ended 31 December 2007 following hearings in October 2017 and November 2018.
The misconduct and sanctions were related to the audit of Tanfield’s inventories and trade receivables, in which the errors and discrepancies were not identified by King and Railton.
The tribunal also found that Railton’s response to a profit warning in Tanfield’s 2008 trading statement was inadequate.
In 2009, the FRC began looking into the 2007 and 2008 audits of Tanfield Group. In 2014, a formal complaint was delivered against the firm in regards to the 2007 audits.
Baker Tilly undertook the audits, King was the engagement partner for the audits of Tanfield, and Railton was the engagement partner for the two subsidiaries under investigation.
Baker Tilly UK Audit was brought under RSM UK branding in 2015 after it left Baker Tilly International in 2014
By Asena Degirmenci