PwC probed over BT’s scandal at Italian arm

BT’s former auditors, PwC, are facing an investigation by the accounting watchdog following a scandal at the telecoms giant’s Italian arm.

Earlier this month BT hired KPMG to replace PwC, which had overseen the accounts since it went public in 1984.

Today the Financial Reporting Council said it had begun a probe into audits by PwC of BT for three years of financial statements.

The investigation will focus on BT’s reports in 2015, 2016 and 2017.

In January BT, which is led by Gavin Patterson, admitted there had been fraud at its Italian arm over those years.

That led to a £530 million writedown and a spectacular crash in the shares, which fell by a third in a matter of hours. The stock has yet to recover and the shares were today at 295p, up 1.2p.

The company filed a criminal complaint with Italian prosecutors in April, accusing several former executives and other employees of unlawful conduct. European boss Corrado Sciolla left in the wake of the scandal.

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