02 Sep 2021
The U.K.’s accounting watchdog filed a disciplinary complaint against KPMG LLP, a former partner and current and former employees of the accounting firm over their role in past audits of two U.K. companies.
KPMG and the individuals cited provided “false and misleading information” and documents to the Financial Reporting Council when it was reviewing two earlier KPMG audits, the regulator said in a statement. One was a 2016 audit of now defunct contractor Carillion Plc and the second a 2014 audit of Regenersis Plc, the regulator said.
KPMG said it alerted the regulator when it discovered the issues in 2018 and 2019 and suspended the people involved.
“The allegations in the formal complaint would, if proven, represent very serious breaches of our processes and values,” the accounting firm said. “We have cooperated fully with our regulator throughout their investigation.”
The individuals implicated in Wednesday’s announcement include the engagement partners for the Carillion and Regenersis audits. The complaint, however doesn’t allege misconduct arising from the audits being badly done or the financial statements not being properly prepared, the FRC said. The 2016 audit of Carillion’s financial statements is being probed in separate investigations.
KPMG is under increasing pressure in the U.K. where the Big Four firm just last month was fined 13 million pounds ($17.9 million) and was severely reprimanded for its advisory work on the sale of Silentnight Holdings Plc to U.S. private equity firm HIG Capital.
By Karin Matussek and Ellen Milligan, Bloomberg, 1 September 2021
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