UK Audit Regulator Sanctions BDO & Two Former Partners After Oversight Failures Come to Light

Key Takeaways

• Sanctions Against Firm and Partners: The FRC imposed sanctions on BDO LLP and two former audit engagement partners after they admitted to Misconduct.
• Failures in Oversight: A Senior Manager was able to issue auditor’s reports and create false audit evidence due to insufficient supervision and weak internal controls.
• BDO Financial and Reporting Requirements: BDO will pay a £5.85 million sanction after discount, repay fees for affected audits, receive a Severe Reprimand, and report to the FRC for two years on improvements.
• Partner Restrictions: Former partners John Everingham and Kevin Cook received Severe Reprimands, financial penalties, and prohibitions on performing audit work for six years and three years respectively.

Deep Dive

The Financial Reporting Council has issued sanctions against BDO and two former audit engagement partners after uncovering systemic failures that allowed a Senior Manager at the firm to carry out dishonest conduct on numerous audits over several years.

The sanctions, published on 6 November 2025, follow a wider investigation into how the Senior Manager was able to create false audit evidence, issue auditor’s reports without proper approval, and electronically insert partner signatures on audit reports between 2015 and 2019. The findings raised questions about the strength of BDO’s audit supervision and its internal systems during that period.

While the Senior Manager’s own sanctions were made public in late 2024, the FRC’s latest findings focus on BDO and the two engagement partners responsible for oversight at the time, John Everingham and Kevin Cook. Both admitted failures in their supervision and review processes, which allowed the misconduct to go undetected and, in some cases, led to auditor’s reports being issued without sufficient audit evidence.

The regulatory findings also pointed to a broader issue. where internal warnings and reports surfaced during the period that should have prompted scrutiny, but did not. The FRC concluded that BDO’s response to those red flags, as well as its overall system of controls governing partner oversight and audit quality, was inadequate between 2012 and 2019.

Sanctions and Remedial Measures

BDO will pay a sanction of £5.85 million after settlement discount, and is required to take reasonable steps to repay audit fees linked to affected audits where unauthorized reports were issued. The firm has also been given a Severe Reprimand and must report to the FRC every six months for the next two years on its control improvements. In addition, £716,000 is to be paid to cover the regulator’s costs.

Mr Everingham will pay a reduced sanction of £189,000 and has been barred from performing audit work for six years. His penalty was increased slightly before discount to reflect what the FRC described as incomplete and inaccurate cooperation during the investigation. Mr Cook will pay £90,000 and is restricted from audit work for three years. Both have also received Severe Reprimands.

The FRC acknowledged that BDO undertook its own forensic review after the Senior Manager left the firm in late 2019 and has since taken steps to strengthen controls. Over the next two years, the regulator will receive regular reports on the progress and effectiveness of those reforms.

In a statement accompanying the decision, Deputy Executive Counsel Jamie Symington said that the shortcomings at BDO created conditions in which misconduct “could occur and remain undetected,” adding that the case illustrates how weaknesses in audit supervision can have long-running consequences for audit quality and trust in the profession.

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