PracticeAccounting FirmsWatchdog tells KPMG to revise materiality guidance

Watchdog tells KPMG to revise materiality guidance

KPMG told to take "prompt action" to review and revise its audit guidance on materiality

Watchdog tells KPMG to revise materiality guidance

“PROMPT ACTION” must be taken by KPMG to review and revise its audit guidance on materiality, after the FRC raised concerns about the firm’s lack of progress in addressing previous failings.

In its annual review of the firm’s audit work, which found that 75% of the 20 audits it inspected were performed to a good standard, the FRC raised concerns “about the rate of progress in addressing our prior year findings relating to materiality”.

The FRC raised concerns on six audits in respect of the materiality levels set. In three of those audits, the overall materiality levels set were “inappropriately high”, it said.

On two further audits, materiality for work at component level had been set at the same level as overall materiality for the group financial statements, contrary to auditing standards while in another audit it was “unclear why materiality had not been reduced at the completion stage, given that reported profits were lower than forecast,” the report stated.

KPMG said it is “fully committed to continuous improvement in audit quality and independence processes and invest significant time and resources in developing and implementing our response to internal and external inspection findings”.

Related Articles

KPMG replaces PwC as Croda auditor

Accounting Firms KPMG replaces PwC as Croda auditor

4d Emma Smith, Managing Editor
FRC closes investigation into PwC over Barclays compliance

Accounting Firms FRC closes investigation into PwC over Barclays compliance

2w Alia Shoaib, Reporter
FRC closes KPMG HBOS audit investigation, Treasury Committee expects ‘full explanation’

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

1m Emma Smith, Managing Editor
EY hired by Carillion to review finances

Accounting Firms EY hired by Carillion to review finances

3m Alia Shoaib, Reporter
FRC launches investigation into PwC over BT audits

Accounting Firms FRC launches investigation into PwC over BT audits

4m Alia Shoaib, Reporter
Deloitte rises in auditor rankings with most FTSE 250 clients

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

2m Alia Shoaib, Reporter
Partner joins BDO from KPMG

Accounting Firms Partner joins BDO from KPMG

2m Alia Shoaib, Reporter
BDO overtakes KPMG to take top spot in AIM auditor rankings

Accounting Firms BDO overtakes KPMG to take top spot in AIM auditor rankings

3m Alia Shoaib, Reporter