Accountancy giant PwC hit the headlines during the 89th Academy Awards Oscars show.
Confused as to why a global financial giant was implicated in an Oscars blunder? It’s actually fairly straight forward.
The auditor is in charge of the balloting process, and as part of this is charged with guarding the envelopes that reveal the winners.
This means that PwC is to blame for the Best Picture mishap which saw La La Land announced as the winner of the coveted award when in fact it was destined for Moonlight.
The company has since released a statement saying it deeply regretted the mistake and that “the presenters had mistakenly been given the wrong category envelope”.
“We are currently investigating how this could have happened and deeply regret that this occurred,” said PwC US.
The real scandal
All fun and games aside, last night’s event has led eyes away from a slightly bigger scandal you should know about.
The UK accountancy watchdog, the Financial Reporting Council (FRC), has announced it is investigating PwC in relation to an audit of financial statements of IT group Redcentric for the two years ended 31 March 2015 and 31 March 2016.
In a statement, the FRC said the investigation will consider, but not be restricted to, issues regarding misstated accounting balances.
The accounting irregularities at Redcentric were noticed in November 2016. The company had begun a review of its current and historic balance sheets when the misstated accounts were noticed
The company’s chief financial officer, Tim Coleman, resigned as a director of the company straight away, while Redcentric announced a day later that he has been “served notice … and placed on gardening leave with immediate effect”.
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Deloitte and Nabarro were appointed to carry out an independent forensic review.
The IT group saw its shares plunge 66 percent in November once the irregularities were announced. As well as a hit on the shares, the mistakes meant the company needed to reduce its net assets by around £10m, making the company’s debt around £30m, instead of the £17m it suggested in September.
PwC UK released a statement to say it would “cooperate fully with the FRC in its enquiries”.
When contacted, Redcentric decline to comment.