UK Regulator Fines KPMG £3 Million

By:
Chris Gaetano
Published Date:
Jun 12, 2018
Gavel

The UK's Financial Reporting Council, which regulates auditors, fined Big Four firm KPMG over poor audit work for insurance software company Quindell which, after the auditors blessed the financial statements, restated its information and turned an £83 million profit into a £68 million loss, according to the Guardian. The regulator said that the firm had failed to obtain reasonable assurance that the financial statements as a whole were free from material misstatement, failed to obtain sufficient appropriate audit evidence, and failed to exercise sufficient professional skepticism.

A spokesperson for KPMG said, in part: “We have cooperated fully throughout the FRC’s investigation and have already updated our audit processes and procedures to address the areas of concern.

“We regret that some aspects of our audit for the year ended 31 December 2013 did not meet the required standards. As we stated in our audit opinion for the following year, certain information given to KPMG contradicted representations previously made by former members of management.

“Nonetheless, we accept the FRC’s findings that in two specific areas of the audit, our challenge for the year ended 31 December 2013 should have gone further."

The fine had originally been £4.5 million, but the government knocked it down to £3 million as part of the settlement. 

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