Jessica Fino 21 Jun 2018 04:48pm

PwC partner backdated his BHS audit, says chairman

Former PwC partner Steve Denison spent only two hours working on the BHS audit before signing off the accounts and he backdated his audit opinion, according to reports

PwC chairman Kevin Ellis, wrote to almost 1,000 of the Big Four firm’s partners stating that Denison’s audit work was “inadequate”, according to an email seen by Sky News.

"He was responsible for the overall quality of the audit, supervising the audit and issuing the auditor's report.

"He failed to carry out these responsibilities appropriately, delegating too much work to a junior team member and only recording two hours of work during the completion stage," Ellis wrote.

Denison was given a record fine and stopped from conducting any audit work for 15 years by the FRC for his work at the troubled retailer.

Sir Philip Green sold the business for £1 just five days after PwC signed off its accounts. This was done two months earlier than in previous years.

Ellis also revealed Denison backdated his audit opinion‎ that BHS was a going concern by three days. This means he made "a false statement on the audit file relating to the circumstances of the backdating".

Ellis said the revelations contained in the email would be an "uncomfortable reading" for the PwC’s partners.

He added, "This situation should not have happened and we need to face up to the failings and learn the lessons.”

This week chair of the Work and Pensions Commission Frank Field has just written to PwC asking for more details about its audit work at BHS, namely how many members of staff worked on the audit for how many hours and what were the charge out rates for each grade level of the audits.

Field also wrote to Denison questioning him about his involvement in the sale of BHS by Sir Philip Green to Retail Acquisitions in March 2015 for £1.

Sir Philip Green company Taveta Investments, which owns Arcadia Group, also made an application for a judicial review designed to stop the FRC publishing the entire findings of its investigation.