The UK’s accounting watchdog filed a disciplinary complaint against KPMG LLP, a former partner and current and former employees of the accounting firm over past audits of two UK companies.
KPMG and the individuals cited provided “false and misleading information” and documents to the FRC during its review of two KPMG audits, the Financial Reporting Council 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 the firm took the matter “extremely seriously” and had alerted the regulator itself when it discovered the issues in 2018 and 2019. The people involved were suspended, it said.
“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.”
KPMG is under increasing pressure in the UK 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 US private equity firm HIG Capital.
The individuals implicated in Wednesday’s announcement include the engagement partners for the Carillion and Regenersis audits. The complaint doesn’t claim the audits were wrongly done or financial statements weren’t properly prepared. The 2016 audit of Carillion’s financial statements is being probed in separate investigations.
A disciplinary tribunal has been convened to review the case. This hearing is scheduled to start on January 10.
© 2021 Bloomberg
