FRC fines KPMG £700,000 for poor audit
The FRC has fined KPMG UK £700,000 and reprimanded KPMG UK’s former senior partner for Manchester, Nicola Quayle for a “failure to apply sufficient professional scepticism” in the audit of an unnamed company in the financial year 2015/16.
The £700,000 fine was discounted to £450,000 for early settlement, while Quayle also saw her fine of £45,000 reduced to £29,250.
Claudia Mortimore, deputy executive counsel to the FRC, said: “This is a measured and proportionate package of sanctions, which balances on the one hand the limited nature of the breaches, which did not call into question the truth or fairness of the financial statements, with the fact that auditors should have been on alert to pay particular attention to these types of complex supplier arrangements. Professional scepticism remains at the core of an auditor’s duty and the FRC will take appropriate action where it has been lacking, as in this case.”
While the decision notice said that the FRC does not question the “truth or fairness of the company’s FY2016 financial statements,” the seriousness of the breaches was aggravated by the fact that “both KPMG and Ms Quayle have poor recent regulatory records”.
KPMG UK did say in a statement: “We regret that specific aspects of our audit of this company for the 2015/2016 financial year did not meet the required standards.
“As the FRC makes clear, there is no question as to the truth and fairness of the financial statements. Audit quality is of paramount importance to our firm and we have updated our audit processes and procedures to address the areas of concern.”
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...View resource
In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...View resource
In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...View resource
The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...View resource
While objectivity and independence are critical, greater collaboration could be the key to stronger assurance Read More...View article
FRC audit quality scores reflect "unacceptable" performances from some firms and reinforce need for government reforms Read More...View article
While the responsibility of auditors is often misinterpreted, the capabilities of the profession must still improve, according to market participants ...View article
Market capacity is cited as the key concern by market participants Read More...View article
Recent data shows the level of scepticism of audit among business owners Read More...View article
"We do not see it as being necessary or desirable" Read More...View article
Sources say the government must find more balance and focus Read More...View article