{"id":507739,"date":"2026-05-28T23:36:21","date_gmt":"2026-05-28T23:36:21","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/507739\/"},"modified":"2026-05-28T23:36:21","modified_gmt":"2026-05-28T23:36:21","slug":"bdo-fined-2m-for-pervasive-breaches-in-audit-of-collapsed-nmcn-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/507739\/","title":{"rendered":"BDO fined \u00a32m for \u2018pervasive breaches\u2019 in audit of collapsed NMCN \u2013 The Irish Times"},"content":{"rendered":"

The UK accountancy regulator has fined BDO <\/a>\u00a32 million (\u20ac2.3 million) for \u201cpervasive breaches\u201d in its audit of the collapsed construction company NMCN.<\/p>\n

The Financial Reporting Council (FRC) said on Thursday that mistakes in NMCN\u2019s 2019 audit \u2013 the company\u2019s final set of accounts before it filed for administration \u2013 were \u201csignificant and serious\u201d, and highlighted \u201cnumerous and pervasive breaches that were fundamental to BDO\u2019s audit work\u201d. <\/p>\n

The FRC also fined the audit partner who had signed off on the NMCN audit, Geraint Jones, \u00a375,000. Both fines were discounted for co-operation to \u00a31.3 million and about \u00a350,000, respectively. BDO admitted the breaches.<\/p>\n

The demise in 2021 of NMCN, formerly North Midland Construction, followed a months-long delay in announcing its financial results for 2020. The group had delivered major building and national infrastructure projects.<\/p>\n

BDO, the UK\u2019s fifth-largest accounting group, had issued clean audit opinions of the London-listed company in 2018 and 2019 on accounts that were later found to include more than \u00a321 million of material misstatements.<\/p>\n

NMCN\u2019s 2019 accounts, showing double-digit growth in revenue and profit, were signed off just months before the unexpected exit of the construction company\u2019s chief executive and chief financial officers. The group then began its tailspin, with estimated losses for 2020 ballooning to \u00a343 million.<\/p>\n

BDO faces heightened regulatory scrutiny over its audit work, including that for NMCN. The challenger firm has recently been the most successful of the mid-tiers in winning major audits away from the Big Four, but has been lambasted by the regulator for five straight years for audits that fall \u201csignificantly short of expectations\u201d and was ranked the worst performer among its peers during the regulator\u2019s 2025 inspection. <\/p>\n

\"\"Will new pay transparency rules close the gender pay gap for good?<\/p>\n

The watchdog said that despite identifying significant risks, NMCN had materially misstated revenues and profits on long\u2011term contracts, and that BDO failed to gather \u201creasonable assurance\u201d that the financial statements were free from material misstatement. <\/p>\n

BDO also failed to conduct the audit with professional scepticism, the FRC said, and did not gather enough audit evidence to conclude NMCN\u2019s going-concern status. It added that the breaches were not intentional or dishonest.<\/p>\n

BDO resigned in 2020 after 10 years as auditor of NMCN. Jamie Symington, the FRC\u2019s deputy executive counsel, said BDO had \u201cfailed to critically assess evidence, challenge management\u2019s assertions and exercise professional scepticism in important areas including going concern\u201d.<\/p>\n

[\u00a0BDO axes 31 partner roles as AI pressure grows and profits fallOpens in new window<\/a>\u00a0]<\/p>\n

BDO said its audit \u201cfell below the standards that we expect\u201d but added that it had made \u201csignificant structural changes\u201d to its audit practice in the six years since the NMCN audit.<\/p>\n

\u201cWe remain committed to delivering consistency in the high quality of our audits. The FRC has noted the exceptional level of our co-operation,\u201d it said.<\/p>\n

BDO is also facing an \u00a380 million lawsuit from the administrators of NMCN, which claims the auditor drafted two versions of its audit opinion in 2019: one with a material uncertainty over the company\u2019s going concern, the other giving it a clean bill of health. The administrators claim that BDO signed off the clean version after NMCN management sent BDO \u201csignificantly more optimistic\u201d cash-flow predictions. At the time, BDO declined to comment on an ongoing legal case.<\/p>\n

The watchdog is separately investigating BDO for its audit of Home REIT, a property fund, which is winding down after a short-seller accused it of misleading investors.<\/p>\n

In November, the watchdog fined two former BDO partners and the firm more than \u00a36 million for separate \u201cextremely serious\u201d misconduct. \u2013 Copyright The Financial Times Limited 2026<\/p>\n","protected":false},"excerpt":{"rendered":"The UK accountancy regulator has fined BDO \u00a32 million (\u20ac2.3 million) for \u201cpervasive breaches\u201d in its audit of…\n","protected":false},"author":2,"featured_media":428423,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[73],"tags":[49567,79,18,19,17],"class_list":["post-507739","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-bdo","tag-business","tag-eire","tag-ie","tag-ireland"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116654833286106527","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/507739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=507739"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/507739\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/428423"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=507739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=507739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=507739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}