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FRC launches probe into KPMG Ted Baker audit

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THE FRC has launched an investigation into KPMG’s audit of fashion retailer Ted Baker.

The accounting watchdog said it will investigate the firm’s consideration of and compliance with ethical standards in connection with the provision of non-audit services during its audit of the financial statements of Ted Baker and one of its significant affiliates for the periods ended 26 January 2013 and 25 January 2014.

No members employed by Ted Baker are the subject of the FRC’s investigation.

Last year, the FRC fined KMPG  £390,000 for breaching ethical standards for auditors in two separate cases of misconduct that date back to 2010 and 2011.

A KPMG spokesperson said: “We note today’s announcement by the FRC of its investigation in relation to our consideration of and compliance with ethical standards in connection with the provision of non-audit services during our audit of the financial statements of Ted Baker plc (and one of its significant affiliates) for the periods ended 26 January 2013 and 25 January 2014.

“We have always sought to ensure that the non-audit services we provide to audit clients are consistent with both the letter and the spirit of prevailing requirements  However, we recognise that the application of principles requires the exercise of professional judgement and, in this instance, the FRC’s view may differ from our own.  We will of course co-operate fully with the FRC’s investigation.”

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