PracticeAccounting FirmsFRC launches investigation into KPMG’s Rolls-Royce audit

FRC launches investigation into KPMG’s Rolls-Royce audit

The investigation relates to the financial statements of Rolls-Royce Group for the year ending 31 December 2010, and Rolls-Royce Holdings for the years ending 31 December 2011 to 31 December 2013

FRC launches investigation into KPMG’s Rolls-Royce audit

The Financial Reporting Council (FRC) has announced that it has begun an investigation into KPMG’s audit of the financial statements of the Rolls-Royce Group.

The decision follows the approval of a Deferred Prosecution Agreement (DPA) between Rolls-Royce and the Serious Fraud Office (SFO) in January 2017, relating to 12 counts of conspiracy to corrupt, false accounting and failure to prevent bribery.

Under the DPA, Rolls-Royce agreed a UK settlement of £497.25m plus £13m costs. Additional agreements with the US Department of Justice and Brazil’s Ministério Público Federal brought total payment to approximately £671m.

The investigation into KPMG’s audit relates to the financial statements of Rolls-Royce Group for the year ending 31 December 2010, and Rolls-Royce Holdings for the years ending 31 December 2011 to 31 December 2013.

In response to the announcement, KPMG said: “It is important that regulators acting in the public interest should review high profile issues. We will co-operate fully with the FRC’s investigation, which follows the SFO’s investigations into Rolls-Royce. We are confident in the quality of all the audit work we have completed for Rolls-Royce, including the 2010-2013 period the FRC is considering.”

Following the SFO’s settlement with Rolls-Royce earlier this year, Barry Vitou, partner and head of global corporate crime at Pinsent Masons, said that the SFO was “in the big league” when it came to investigating and resolving bribery investigations.

Related Articles

FRC closes KPMG HBOS audit investigation, Treasury Committee expects ‘full explanation’

Accounting Firms FRC closes KPMG HBOS audit investigation, Treasury Committee expects ‘full explanation’

4d Emma Smith, Managing Editor
Deloitte rises in auditor rankings with most FTSE 250 clients

Accounting Firms Deloitte rises in auditor rankings with most FTSE 250 clients

3w Alia Shoaib, Reporter
Partner joins BDO from KPMG

Accounting Firms Partner joins BDO from KPMG

3w Alia Shoaib, Reporter
KPMG elects global chairman

Accounting Firms KPMG elects global chairman

6m Emma Smith, Managing Editor
KPMG elects new UK chairman

Accounting Firms KPMG elects new UK chairman

7m Emma Smith, Managing Editor
EY hired by Carillion to review finances

Accounting Firms EY hired by Carillion to review finances

2m Alia Shoaib, Reporter
Introduction to KPMG UK’s new leadership team

Accounting Firms Introduction to KPMG UK’s new leadership team

4m Emma Smith, Managing Editor
The importance of investing in people

Accounting Firms The importance of investing in people

6m Emma Smith, Managing Editor