The verdict comes after an investigation revealed failings in PwC’s 2017 audit of BT Group Plc after the discovery of £512m fraud.

The financial sanction for the big four firm has been adjusted to £1.75m and partner Mr Hughes’ has been adjusted to £42,000 for ‘admissions/early disposal’.

Non-financial sanctions have also been announced including “a Severe Reprimand and a declaration that the Audit Report did not satisfy the Relevant Requirements”.

Claudia Mortimore, deputy executive counsel, said: “In determining the financial impact of a major fraud detected within a business, difficult but important issues relating to appropriate accounting treatment and disclosures will need to be addressed.

“It is vital that these are subject to robust audit so that the users of financial statements can have confidence that the financial impact is properly and accurately stated in subsequent financial statements.

“The sanctions imposed in this case, where certain elements of the adjustments following a fraud were not subject to the required level of professional scepticism, underscore this message and will serve as a timely reminder to the profession”.