Accounting Woes Spread to France as Mazars, PwC Hit by Fines
(Bloomberg) -- Mazars SA and PricewaterhouseCoopers LLP were fined a total of 450,000 euros ($546,000) by French audit regulators for shortcomings related to a client that had been inflating its revenue with fake bills that could be worth hundreds of millions of euros.
Mazars was fined 400,000 euros for failing to abide by its professional duties when certifying the accounts of Agripole, the parent company of several agrifood firms and of Financière Turenne Lafayette, according to the enforcement committee of France’s Haut Conseil du Commissariat aux Comptes, known as H3C.
The case adds to the list of accounting blunders in Europe topped by the failure of Ernst & Young to detect a missing 1.9 billion euros at collapsed German payments provider Wirecard AG. In the U.K., accountants have been criticized in the wake of companies like Carillion Plc and Patisserie Valerie going bust.
Mazars was also criticized for not properly monitoring the work of a former partner, who was fined 100,000 euros and banned from the profession. The regulator also proposed that the accounting firm face a suspended 12-month ban.
Mazars said in a statement it would appeal the decision at France’s top administrative court and added that it considers itself a victim of an “extremely sophisticated fraud” set up by the late owner of Agripole.
Two PwC units were also reprimanded and one of them, PwC Audit, was fined 50,000 euros after being found negligent in the case. PwC said in a statement that “compliance with professional standards and ethical rules is a priority,” without specifying whether it would appeal.
In the French case, a parallel criminal probe is being run by Paris investigative judges into the fraud allegations and several people have already been charged. Mazars has been granted victim status in that probe.
During the hearings last year in the French case, an H3C official who acted as a prosecutor sought a 1 million-euro fine -- the maximum for the regulator -- for Mazars and PwC. On Friday, four other people involved in the case got a variety of sanctions ranging from a warning to fines and a ban.
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