(Reuters) – Britain's accounting watchdog on Wednesday fined the international accounting firm BDO £ 160,000 ($ 207,040) for unintentional breaches of rules in its audit of AmTrust Europe Ltd. and said the auditor would need to implement a training program.
The Financial Reporting Council said that the fine was reduced from £ 200,000 for early assumptions regarding audits for 2014 and 2015. The truth and fairness of the financial reports for the two years were not questioned, and the violations were not intentional, said FRK.  BDO stated that this was its first sanction from the FRK and that it was very disappointed that its audit work for the European entity in New York-based AmTrust Financial Services Inc. did not meet the required standards.
The BDO said the shortcomings had been addressed and its procedures further strengthened following the BDO's merger with Moore Stephens.
One of the violations related to an error in the documentation. Other infringements concerned provisions for receivables and the use of independent actuaries as experts.
"The shortcomings in this case related to an area of high audit risk, namely the consideration of an insurance company's strategy for its provision for receivables," said Jamie Symington, FRK's Deputy CEO.
"The auditors relied on the opinions of independent expert actuaries without taking sufficient steps to gain an understanding of or evaluate their work."
Some of the shortcomings emerged in the FRC's annual inspections of samples of audits of the UK's leading accounting firm in 201
The watchdog said the fine, which included an indictment of BDO partner David Roberts, reflected that BDO and Mr. Roberts has a good compliance history and disciplinary records without previous sanctions.
BDO, among the next level down from the Big Four auditors, is required to implement a training program to improve how it achieves and evaluates uates independent actuarial audit evidence.