Core Points - The Financial Reporting Council (FRC) in the UK has penalized BDO LLP and two former audit partners for misconduct related to audit deficiencies [1][4] - The misconduct involved dishonest activities by a senior manager at BDO between 2015 and 2019, including fabricating audit evidence and issuing reports without proper authorization [2][3] Summary by Sections Investigation and Findings - An investigation was initiated after a senior manager at BDO was found to have committed dishonest activities across multiple audits [1] - The senior manager's actions included fabricating audit evidence and using unauthorized electronic signatures [2] - BDO's internal controls were inadequate, failing to act on internal reports that could have highlighted the senior manager's misconduct [2] Oversight Failures - John Everingham and Kevin Cook did not provide sufficient oversight on audits involving the senior manager, with Everingham failing to oversee 21 audits and Cook neglecting 13 audits [3] - Everingham signed off on ten audit reports from 2015 to 2018 without adequate supporting documentation [3] Penalties and Repercussions - BDO is required to pay a financial penalty of £5.85 million ($7.6 million) and reimburse audit fees for affected audits [4] - John Everingham faces a fine of £189,000 and a six-year prohibition from audit work, while Kevin Cook received a £90,000 penalty and a three-year prohibition [5] - BDO must file biannual reports to the FRC for two years detailing progress in addressing the identified issues [4][6]