Former Quindell auditor slapped with £700,000 fine

The auditor to the scandal-struck former Quindell business was slapped with a £700,000 fine by the UK’s accounting watchdog on Tuesday for conduct falling “significantly short” of standards.

Arrandco Audit, previously called RSM Tenon, and partner Jeremy Filley admitted misconduct and failing to exercise “sufficient professional scepticism” over its audit of Quindell, the insurance claims processor and legal services firm now known as Watchstone.

The fine would have been higher at £1 million if Arrandco had not cooperated, while Filley was fined £56,000.

The Financial Reporting Council launched its investigation into RSM Tenon and its successor as Quindell’s auditor, KPMG, in August 2015 when the company made a big restatement of previous years’ accounts, racking up huge losses.

The restatement also included the accounting treatment of Quindell’s acquisition of Mission Capital when RSM Tenon was auditing the accounts, cutting the goodwill related to the deal by £25 million in 2012 and 2013.

The FRC’s investigation into KPMG is still ongoing, as is the Serious Fraud Office’s Quindell probe.

Watchstone is in a court battle with Aussie legal giant Slater & Gordon, which bought Quindell’s professional services division in 2015 before being forced to take huge losses on the deal.

Slater & Gordon is seeking up to £637 million in damages in the court action.