Moore Stephens: Accountants who audited Presbyterian Mutual Society are fined £140,000
The accountancy firm which audited the Presbyterian Mutual Society (PMS) has been fined £140,000.
The PMS had to be bailed out by the government in 2010 after savers rushed to withdraw money.
The Financial Reporting Council (FRC) found accountants Moore Stephens failed to obtain an adequate understanding of the legal and regulatory environment in which the PMS operated.
Moore Stephens audit partner, David McClean, was also fined £20,000.
The FRC said the firm and audit partner failed to adequately test PMS board and management assumptions that it was complying with its own rules and with legislation and regulation.
It added that the firm also failed to apply professional scepticism and to obtain sufficient audit evidence to corroborate assurances and representations provided by management.
The Department of Enterprise (DETI) bailed the PMS out with £225m of loans.
Annual instalments are due to repay £175m over 10 years, with the £50m balance being paid when the society is wound up.
The society could only make half of its scheduled loan repayments in the last two years.
This does not alter the requirement on the society for the full repayment of the loan.