Deloitte has been fined more than £900,000 by the accounting watchdog after failures in its audit of the building materials firm SIG. The Financial Reporting Council (FRC) also handed a fine of £36,250 to Simon Manning, who was the audit engagement partner working on the account. Deloitte’s initial fine was £1.25m but the sum was discounted after the “big four” accountancy firm admitted the breaches. Manning’s fine was also reduced from £50,000 to £36,250. Deloitte and Manning admitted to two breaches in relation to the audit of supplier rebates – financial incentives paid by SIG to its suppliers – and cash. The FRC said that Deloitte failed to obtain enough audit evidence testing the rebate terms and the debtor balances. It also failed to “exercise sufficient professional scepticism” by not investigating indications that rebate debtor balances could have been overstated. Jamie Symington, deputy executive counsel, said: “These breaches concerned two discrete areas of the audit of a particular subsidiary of SIG plc. They involved contraventions of requirements which are fundamental to the role of the independent auditor, and were associated with material misstatements in SIG plc’s accounts which had to be corrected. “The breaches in respect of supplier rebates were made all the more serious by the fact that the FRC had highlighted these complex supplier arrangements as requiring particular attention from auditors.” The financial sanctions were in relation to the audit of financial statements of SIG in the financial years ended 31 December 2015 and 31 December 2016. A spokesperson for Deloitte said: “We are disappointed that our work on the full-year 15 and full-year 16 SIG plc audits – relating to the audit of supplier rebates and cash – fell short of the high standards expected of us. “We have learned from the matters identified by the FRC and remain committed to audit quality and its continuous improvement.”