A second £5m fine has hit Big Four accounting firm PwC in four months, issued by the Financial Reporting Council (FRC) over its role as auditor of collapsed fellow accountants RSM Tenon.

PwC and senior statutory auditor Nicholas Boden were fined £6m and £150,000 respectively, and both severely reprimanded after admitting misconduct in relation to the 2011 audit of RSM Tenon.

PwC’s fine was reduced to £5.1m after a settlement discount, and the firm picked up £500,000 in executive counsel costs.

Boden’s fine was reduced to £114,750, after adjustment for mitigating factors and settlement. The firm also picked up a £5m fine in May, relating to its audit work at Connaught.

The firm and Boden admitted that their conduct fell significantly short of the standards expected for the principle of professional competence and a duty of care, in that they failed to obtain sufficient appropriate audit evidence at RSM Tenon, and failed to exercise sufficient professional scepticism.

Proceedings against Russell McBurnie, RSM Tenon’s former finance director, are ongoing.

RSM Tenon had to restate its 2011 and 2012 accounts in relation to how it recorded bonus payments to staff and its policy for referral fee accounting. The firm went into administration and was sold to Baker Tilly in 2014.

Five separate acts of misconduct were admitted to by PwC and Boden in relation to: the accrual of bonus payments; certain aspects in relation to the recognition of work in progress and amounts recoverable on contracts; the accounting for a lease; the assessment of the impairment of goodwill; and the calculation of goodwill in relation to a subsidiary.

A PwC spokesman said: “We are sorry that aspects of the audit carried out in 2011 fell short of professional standards. We cooperated fully with the FRC during its lengthy investigation and accept its findings.

“We continually review and update our audit processes in response to both internal reviews and external inspection findings. Audit quality is of paramount importance and our annual Audit Quality Reviews show year-on-year improvements.”

​RSM Tenon’s former CEO Andy Raynor was fined and reprimanded in December 2016 after admitting that his conduct fell significantly short of that expected by a member of the Institute of Chartered Accountants in England and Wales.