UK defence services company Babcock was attacked by a shortseller in 2018, with a second report in 2019, alleging overstatement of profits and failure to recognise asset writedowns in a timely manner, "burying" bad news. Babcock initially denied the allegations. However, the CEO and CFO left the company in 2020. Prior to the FY21 results, the company announced a review of its financials. Babcock recorded substantial losses of £1.7bn in FY21, primarily impairment charges for goodwill and other assets, and also restated prior year results to correct various accounting errors signficantly reducing the company's equity. No fraud has been confirmed, although Babcock's auditor, PricewaterhouseCoopers was replaced and fined by the UK regulator together with the audit partner, indicating substandard work.

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