Wood Group’s £13m FCA Fine: The High Cost of Inaccurate Financial Reporting
Key takeaways (read this first)
- Inaccurate results can trigger regulatory action, reputational damage, and stakeholder fallout.
- Weak systems and controls are often the root cause — not one “bad number”.
- Pressure to “make the results fit” is a red flag that can cascade into much bigger problems.
- Good reporting is a process: clear evidence, consistent judgements, and disciplined review.
What happened: the Wood Group case in plain English
The Financial Conduct Authority (FCA) fined John Wood Group PLC £12,993,700 for publishing inaccurate information in its financial results. The FCA stated that, following poor performance on certain projects, Wood Group’s accounting judgements were inappropriately influenced by a desire to maintain previously stated financial results, and that the company did not have adequate systems, controls, or procedures to prevent this.
According to the FCA, this led to inaccurate information being published in Wood Group’s full-year 2022 and 2023 results and its half-year 2024 results. The FCA said the company failed to take reasonable care to ensure that announcements were not false or misleading.
The FCA noted that issues came to light from November 2024 onwards. It also referenced a 78% share price fall by April 2025 and that Wood Group’s shares were suspended in May 2025.
Wood Group accepted the findings and received a 30% discount on the penalty. Without the discount, the FCA said the financial penalty would have been £18,562,500.
FCA fines John Wood Group PLC for issuing misleading statements
Why this matters (even if you’re not a listed company)
It’s easy to read a listed-company case and assume it’s “not relevant” to SMEs, owner-managed businesses, or growing groups. That assumption is how small issues become expensive ones.
The principle is the same at every size: decisions are made based on your numbers. If your figures are wrong (or not supported), you create risk for:
- Directors — making strategic calls on cash flow, hiring, investment, and dividends.
- Lenders and investors — evaluating performance, covenants, and future risk.
- HMRC — reviewing tax positions that are built on your underlying accounts.
- Partners and buyers — assessing valuation, earn-outs, and deal terms.
And importantly: when reporting is challenged, it’s rarely just about the final number. It’s about whether you can demonstrate a robust process and reasonable care — clear evidence, consistent accounting judgements, and appropriate review.
The real risk: weak controls, not one-off mistakes
In most reporting failures, the problem isn’t a single person typing a number incorrectly. The bigger issue is a process that allows errors to survive multiple stages of review.
Common weak points we see in growing businesses include:
- Over-reliance on one individual to “know the numbers” without documentation and checks.
- Inconsistent judgements (revenue recognition, provisioning, project accounting, cut-off, accruals).
- Poor reconciliations (bank, control accounts, intercompany, VAT, payroll).
- Rushed month-end where deadlines override accuracy and evidence.
- Spreadsheet risk — manual models with no audit trail, version control, or independent review.
If you want accuracy, you need discipline: documented judgements, reconciliations that actually reconcile, and a review process that challenges the numbers rather than rubber-stamping them.
Practical steps to reduce reporting risk (and sleep better)
- Put evidence behind every judgement that matters.
If you can’t explain it simply — and prove it — it’s a risk. - Reconcile early and often.
Waiting until year-end to “sort it out” is how errors become embedded. - Separate preparation from review.
Even in small teams, independence can be created through structured checks. - Control your spreadsheets.
Versioning, locked cells, consistent inputs, and a clear audit trail are non-negotiable. - Watch for “result pressure”.
If the business starts aiming for a number and working backwards, stop and reset the process.
If you’re scaling, these controls are not “corporate admin” — they are how you protect the business, protect directors, and protect future value.
Final thought
The Wood Group case is a blunt reminder: accuracy is not a box-ticking exercise — it is the foundation of trust.
If you can’t rely on the numbers, you can’t reliably run the business, defend your tax position, or protect directors from risk.
If you want this not to happen in your business, work with a team that treats reporting like a controlled process — not a last-minute output. At RiverView Portfolio, we help businesses tighten financial reporting, improve controls, and build accounts and tax filings on evidence-backed numbers, so you reduce risk and avoid expensive corrections later. If you’d like us to review your current processes and identify where inaccuracies are most likely to creep in, get in touch via our contact page.
FAQs
Was Wood Group fined for fraud?
The FCA’s announcement focuses on inaccurate and misleading market statements and inadequate systems and controls.
The key issue highlighted was a failure to take reasonable care and to maintain adequate procedures and controls.
What does “misleading financial statements” mean in practice?
It means published results gave the market an inaccurate picture — for example, because of unsupported accounting judgements,
incorrect recognition of income/costs, weak project accounting, or omissions that affect how readers interpret performance.
Does this matter if my business isn’t listed on the stock market?
Yes. Stakeholders still rely on your numbers — HMRC, banks, investors, buyers, and your own leadership team.
Poor accuracy can lead to tax exposure, covenant breaches, valuation issues, and expensive “clean-up” work later.
What are the most common causes of inaccurate reporting in SMEs?
Weak month-end processes, unreconciled control accounts, inconsistent accounting judgements, spreadsheet errors,
and insufficient review (particularly where one person prepares and “approves” the numbers).
How can directors show they’ve taken “reasonable care”?
By ensuring there is a documented reporting process: reconciliations are completed and reviewed, key judgements are evidenced,
material movements are explained, and there is appropriate oversight (including challenge where something doesn’t look right).
When should I tighten controls — at year-end or earlier?
Earlier. Year-end is too late to discover months of issues. Strong month-end discipline reduces errors, improves decision-making,
and makes compliance work faster and less stressful.
