KPMG fined £3 million for failing audit

The British audit regulator, the FRC, announced on Wednesday that it is fining KPMG 3 million pounds for deficiencies in an audit conducted on Conviviality, an alcohol distributor that went bankrupt in 2018. KPMG also receives “severe reprimand“more will have to be done”Reporting to the FRC to identify the reasons for deficiencies in the 2017 audit and detailing the corrective actions taken by the company to prevent their recurrence“Adds the regulator in its press release.

The FRC specifically criticizes the firm for not correctly taking into account the risks of inaccuracies and fraud, for failing or lacking to gather sufficient evidence.professional doubt, ,In this case the deficiencies were serious and affected significant portions of the financial accounts“, Claudia Mortimore, Deputy Executive Adviser to the FRC, was quoted in the press release.

However, “The violations were not willful, dishonest, intentional or irresponsible and it is noted that the defendants provided a good level of cooperation with the investigation“, the FRC said. KPMG partner Nicola Quayle, who was responsible for the audits conducted in the accounting years ending April 2017 and April 2018, was fined approximately £81,000.

KPMG did not immediately respond when contacted by AFP. The firm is also accused of providing misleading information regarding the bankruptcy of construction company Carillion in 2018, the subject of a formal complaint investigated by the FRC since last week before a disciplinary tribunal.

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The audit sector in the United Kingdom is in the government’s crosshairs, being pointed to failing symbolic bankruptcies coming in recent years: that of Carillion but also of chain of stores BHS (PwC) or tour operator in 2016 (EY) ) in Thomas Cook. The FRC also opened an investigation on Monday targeting firm PwC to audit the accounts of defense group Babcock, which recently corrected errors and revised its balance sheet to £2 billion.

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