The 800-strong partnership at PWC will pay the Joint Disciplinary Scheme a £150,000 fine and £825,000 in costs.

The JDS said the fine reflected the “substantial financial penalty” that PWC has faced since BCCI collapsed in 1991 with £9 billion of debt.

The hearing was delayed for 15 years because of legal wrangles and a negligence claim against Price Waterhouse by the liquidators of BCCI. In 1998 Price Waterhouse paid $95 million to settle the case.

The JDS said in a report that Price Waterhouse breached accounting rules by failing to disclose the relationship between BCCI and the ICIC group. ICIC was effectively controlled by BCCI though it was listed as a major shareholder in the bank.

The regulator added that Price Waterhouse also failed to examine large loans made by BCCI or the adequacy of the bank’s loan loss provisions.

In 1989, Price Waterhouse bowed to pressure from the Bank of England to clear the accounts without seeking a formal commitment from the Government of Abu Dhabi that it would back BCCI financially, the JDS said.

The following year, Price Waterhouse submitted reports to the Bank of England that revealed the black hole in BCCI’s finances, prompting the Bank to put BCCI into liquidation.

The Cayman Islands arm of Price Waterhouse, now part of PWC, audited BCCI from 1975 until it collapsed in 1991 with £9 billion of debt. Price Waterhouse audited the entire BCCI group in 1987, 1988 and 1989.

Kieran Poynter, chairman of PWC, said: “To continue to contest the matter further would have been an expensive distraction from which no useful lessons would emerge.”

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