PracticeConsultingKPMG sued for £800,000 by ex-audit client.

KPMG sued for £800,000 by ex-audit client.

KPMG is being sued by a Midlands livestock marketing company for almost £800,000 in damages over claims of negligence.

Plans to float Midland Marts Limited were thrown into chaos after investigations by the Big Five firm showed a discrepancy of about £380,000 in its 1997 accounts, according to a High Court writ.

KPMG could not reconcile the figure despite a month’s investigation and told the managing director there were three possible explanations; a shortfall from debtors, overpayment to creditors, or theft.

Subsequent investigations by Horwath Clark Whitehill did not reach any conclusion, except that theft was not thought to be involved.

The flotation of Midland Marts Group was abandoned and MML ceased trading in August 1998, having held its last sale two months earlier.

The writ attributes this to KPMG’s failure to sign off the 1997 accounts.

The company alleges KPMG failed to exercise reasonable competence in planning and conducting the audit, and was negligent. A subsequent audit by Chancery Partnership of the 1997 accounts showed debtors were overstated by £219,000.

KPMG responded: ‘We think that the claim is without merit and we will be contesting it strongly.’

KPMG warns NIC burden is hindering companies

KPMG website

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer