Credit, Collections & Insolvency News
The Financial Reporting Council (FRC) has issued a formal complaint against KPMG, a former partner and some current and former employees over alleged misconduct.
The formal complaint alleges Misconduct against KPMG and several individuals regarding the provision of allegedly false and misleading information and/or documents to the FRC by KPMG in connection with the FRC’s inspections of two audits carried out by KPMG; the audit of the financial statements of Carillion plc for the period ended 31st December 2016 and the audit of the financial statements of Regenersis plc for the period ended 30th June 2014.
The individuals to whom the formal complaint has been delivered include Peter Meehan, the engagement partner for the Carillion audit (who is not alleged to have committed misconduct in respect of matters relating to Regenersis), and Stuart Smith, the engagement partner for the Regenersis audit (who is not alleged to have been involved in matters relating to Carillion). The allegations in the Formal Complaint are made against each of the individuals only in respect of their own conduct and do not suggest that any individual was responsible for the misconduct of any of the other individuals subject to the formal complaint.
The formal complaint does not allege misconduct arising from the performance of the relevant audits, nor does it allege that in either case the financial statements had not been properly prepared. The audit, and preparation, of the 2016 Carillion financial statements are the subject of separate investigations,
The FRC’s investigation was opened in November 2018 after KPMG had self-reported certain matters relating to the review of the 2016 Carillion audit. The scope of the investigation was expanded in July 2019 to include the inspection of the 2014 Regenersis audit after KPMG had self-reported certain matters relating to that inspection.
A disciplinary tribunal has been convened to hear the formal complaint and determine whether or not the Respondents have committed Misconduct. This hearing is scheduled to commence on 10th January 2022.
A KPMG UK spokesperson said “We take this matter extremely seriously. We discovered the alleged issues in 2018 and 2019, and on both occasions immediately reported them to the FRC and suspended the small number of people involved. The allegations in the formal complaint would, if proven, represent very serious breaches of our processes and values. We have cooperated fully with our regulator throughout their investigation.”
