The FRC has extended its original investigation, which intended to analyse audits that took place between 31 March 2017 and 31 March 2018. The earlier investigation was launched following the outcome of an audit quality review. 

The decision was made at a meeting of the FRC’s Conduct Committee on 14 December 2021.

The watchdog said that the decision to extend the investigation follows public announcements regarding the outcome of the Contract Profitability and Balance Sheet review (CPBS) commissioned by Babcock.

The investigation will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure.

A spokesperson from PwC told Scottish Financial News: “We will cooperate fully with the FRC in its enquiries. Audit quality is of paramount importance and we remain committed to our ongoing Programme to Enhance Audit Quality and to the delivery of consistently high-quality audits.

“The FRC’s annual reviews of our audit work, policies and procedures show a continued trend of improvement in our work and we use their insights, together with our own reviews, to continuously improve how we deliver high-quality audits.”