National accountancy firm MHA MacIntyre Hudson, which has a wealth management arm, has been censured by the FCA for failing to notify the FCA of rule breaches by firms it had audited.
The regulator said the failures could have put customers’ money at risk.
MHA is the UK arm of the global consulting firm Baker Tilly International.
MHA is a major UK firm of accountants, tax and business advisers but has made acquisitions to build its UK wealth management arm, including taking over veteran Northampton IFA Cave & Sons in 2022 and relaunching it as MHA Caves Wealth.
Firms that hold client assets are required to have an auditor to provide a client assets report to the FCA on an annual basis. The FCA relies on the accuracy of these client asset reports to monitor whether firms are complying with its rules.
The FCA’s investigation found that between 2015 and 2019, MHA failed to prepare four client assets reports (relating to 2 firms) to the required standard. It failed to report 25 breaches of the rules by firms it had audited. These ranged from failings in documentation, to firm’s assets being held alongside client assets.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “In a first of its kind, this censure underscores the important role that auditors play in providing accurate reports on whether firms are complying with our rules.
“This information helps us to safeguard customer funds and reduce the harm caused by firm failures. We expect all firms to ensure that they’re providing full and accurate reports.”
The regulator did not issue a financial penalty as the, “failings were not committed deliberately or recklessly” and MHA did not make any profits or avoid any losses as a result of the breaches.
MHA was previously censured by the accountancy regulator last month over a separate breach. MHA was fined £200,000 by the Financial Reporting Council while a former partner in the firm and a former employee were also fined for their parts in the breaches.
The £200,000 MHA fine was discounted for mitigation, admissions and early disposal to £120,250. Former MHA partner Deborah Weston was fined £30,000, which was discounted to £19,500, while former employee Geeta Morgan was fined £25,000, discounted to £18,750.
The breaches are not related to the firm's wealth management arm.