Andersen and KPMG missed error at Kvaerner
Big five firms Andersen and KPMG failed to spot a NOK 230m (£18m) error in the accounts of struggling engineering company Kvaerner, which they both audited.
The Anglo-Norwegian company announced on Monday that some project costs relating to labour hours in its Oil & Gas division had not been recognised in its accounts between 1998 and 2000.
It said: ‘The Group expects these costs to have a minor negative impact on the result for the Oil and Gas business area in 2001.’
Andersen, who was Kvaerner’s auditor until April 2000, signed off the accounts in 1998 and 1999. KPMG won the audit from Andersen and signed off the 2000 accounts.
Although a Kvaerner spokesman said there was no connection between the error and the auditors, he added: ‘Clearly this wasn’t picked up by Andersen or by KPMG.
‘The error was discovered last Friday by Kvaerner’s own Oil & Gas accounting team.’
The spokesman said it was ‘simply a procedural error’ and did not believe the oversight would cost KPMG the audit.
Kvaerner does not expect the error to affect liquidity as £16m of the provisions it had made in 1998-2000 had not been used.
Andersen and KPMG were unavailable for comment.
