Deloitte LLC, John Clennett fined collective £4.15m by accountancy watchdog

Deloitte LLP and firm partner John Clennett have been fined a collective £4.15m by accounting watchdog the Financial Reporting Council over their work on the books of Aero Inventory Plc and its subsidiary.

Deloitte was fined a record £4m and Clennett was fined £150,000.

These related to Deloitte and Clennett's work on the accounts of Aero and Aero Inventory (UK) Ltd for the financial years ended 2006, 2007 and 2008.

FRC said this was the finding of an independent Tribunal disciplinary hearing.

"The Tribunal found ... the conduct of Deloitte and Mr Clennett fell significantly short of the standards reasonably to be expected of," said FRC in a statement.

In addition to their fines, both Deloitte and Clennett received severe reprimands.

"The Tribunal also ordered that Deloitte pay all the costs of the proceedings brought against it and Mr Clennett and ordered an interim payment on account of costs of £2,275,000."

Gareth Rees QC, executive counsel to FRC, said the £4m fine was the highest recorded by the FRC for misconduct on a firm.

"It is a clear indication of the importance of the highest standards being maintained in all audits and the seriousness of the failure to perform an adequate audit of these financial statements which led to misleading information about the profits and turnover of the company being made to the market," said Rees in a statement.