7/23/2026 3:10:39 PM | 4 minute read

Notice in a nutshell: FCA fines consulting and engineering company for issuing misleading statements

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Katie Stephen

Co-Head of the Contentious Financial Services Group

Catherine Pluck

Knowledge Of Counsel

Get in touch

Katie Stephen

Co-Head of the Contentious Financial Services Group

Catherine Pluck

Knowledge Of Counsel

Earlier this year, the Financial Conduct Authority (FCA) issued a Final Notice to John Wood Group Plc (the Company) imposing a financial penalty of £12,993,700 in connection with publishing inaccurate information in its financial results.

More details on the findings are set out in the table below but our key takeaways are as follows:

Key takeaways

Robust financial culture around reporting: Firms should ensure that they have in place systems and controls to provide consistent and transparent reporting throughout the company, as well as a strong and robust financial culture to prevent poor practices around accounting judgements. Pressure to maintain financial performance can create a risk of inappropriate accounting and reporting, such as delaying final settlements until after results have been finalised and failing to recognise anticipated future costs. Focus areas for systems and controls include the use of dispensations, provisions and contingencies, as well as accounting around bad debts, costs savings and likely costs.
Timely provision of information to auditors: Auditors provide a vital role in helping to ensure the accuracy and completeness of a company’s financial statement and firms must ensure timely and transparent communication with them, providing sufficient information and notice to enable proper assessment of accounting judgements being made as appropriate, particularly concerning significant adjustments. A culture of not raising issues with auditors until they have been fully resolved and agreed internally risks misleading auditors.
Monitoring enforcement and learning lessons: The publication of this Final Notice follows those issued, in June 2022, to Carillion Plc and, in December 2022, to Metro Bank Plc. The FCA considered that these should have led the Company to consider whether the risks identified in them might arise in its own business and what action should be taken as a result. Its failure to do so was treated as an aggravating factor. Firms should therefore be monitoring enforcement in this area and seeking to identify and address any similar risks within their own organisations.
The FCA’s evolving enforcement approach: This case is an example of both the FCA’s move towards greater investigation transparency, despite the FCA’s decision to abandon its controversial proposals for an enhanced “naming and shaming” regime (see further on this here), and the FCA’s drive to speed up investigations through early settlement: the investigation was announced in June 2025 and settled within nine months. We expect to see the FCA continuing to name those under investigation where possible under its “exceptional circumstances” test or reactively, as well as continuing to prioritise more speedy conclusions. For other recent developments in relation to investigation transparency, please see our briefing here.

Key information

Decision maker	FCA Settlement Decision Makers
Entity	John Wood Group Plc, an international consulting and engineering company with shares admitted to the Official List.
Related material	None
Sanction	Financial penalty: £12,993,700, based on a percentage (0.375%) of the Company’s average daily market capitalisation throughout the Relevant Period (£4,125,000) but multiplied by 5 for deterrence. A higher multiplier would have been applied had it not been for mitigating factors including significant co-operation through a waiver of privilege in respect of an independent review and development of a remediation plan.
Settlement	Yes: 30% discount applied
Provisions	Listing Rule 1.3.3R (misleading information must not be published); and Listing Principle 1 (procedures, systems and controls).
Relevant period	1 January 2023 to 7 November 2024
Factual findings	Between 2019 and 2022: The Company entered into a number of fixed-price contracts under which it was responsible for delivering a project to full completion. Such contracts require subjective accounting judgements to recognise revenue and costs depending upon progress against specific milestones. Mid-August 2024: Senior staff involved in the preparation of the HY24 results did not inform the Audit, Risk and Ethics Committee or the auditors of significant concerns regarding maintaining the FY23 year-end positions. 20 August 2024: TheCompany announced its HY24 results and a decision to record a $140m exceptional charge. A significant proportion of this charge should have been recognised in the Wood Group’s FY22 and FY23 results. The results were announced without the benefit of a review by the auditors and despite their concerns as the Company had not ensured that they had sufficient notice to review the results properly. November 2024: The Company announced that it would be commissioning an independent review to focus on reported contract positions, accounting, governance and controls, including whether any prior year restatement may be required. The share price fell by 60%. March 2025: The Company announced that the independent review had identified material weaknesses and failures in the financial culture within the projects business unit and engagement between group finance and projects. The failings had led to instances of information being inappropriately withheld from, and unreliable information being provided to, auditors. The share price fell a further 30%. 1 May 2025: The Company’s shares were suspended as a result of its failure to publish the FY24 results within the required timeframe. 30 October 2025: The Company published the FY24 results including prior year adjustments reducing the Wood Group's operating profit and earnings for FY22 and for FY23.
Failings	The Company failed to take reasonable care to: ensure that its announcements concerning its FY22, FY23 and HY24 results did not contain false or misleading information (in breach of Listing Rule 1.3.3R); and establish and maintain adequate systems, controls and procedures to enable it to comply with its obligations (in breach of Listing Principle 1). This arose because, during the Relevant Period, it operated a poor financial culture, which resulted in poor practices around accounting judgements and which arose in the context of: the subjective nature of accounting judgements and estimates in particular projects which meant that they were particularly susceptible to inappropriate influence; the risk created by pressure on individuals in relation to financial performance was not adequately addressed; and commercial challenges and wanting to maintain a strong financial position against the background of a potential acquisition of the Company. In addition, the Company’s control framework was insufficiently robust to ensure that accounting judgements in relation to particular projects were made in compliance with applicable accounting standards. The internal pressure was compounded by lack of understanding internally regarding accounting policies and the applicable accounting standards. This increased the risk of inappropriate accounting judgements and certain matters were not raised with auditors reflecting a culture of ‘toeing the party line”. For example, the Company: failed to account for costs appropriately; attempted to recognise revenue inappropriately in dispensations; released project-related provisions and contingencies held against specific risks on certain projects in order to offset losses experienced on other projects within the projects business unit; and made poor and/or over-optimistic accounting judgements, such as overstating costs savings and underestimating future costs to complete on projects and failing to write off debit balances from the Company’s balance sheet, despite some concerns being expressed within the projects business unit that these could no longer be supported.