KPMG Fined £14M For Misconducts In Regenersis, Carillion Audits

The UK's Financial Reporting Council sanctioned KPMG and four former employees after misconduct in its audits of Regenersis and Carillion in 2014 and 2016, respectively.
An independent Disciplinary Tribunal made findings of misconduct following a five-week hearing in January and February 2022, and sanctions were determined following a hearing in May 2022.
KPMG admitted its liability for the acts of all the individuals and that those acts amounted to misconduct.
The wrongdoing concerned "false and misleading information and documents" submitted on the audits of both Carillion and Regenersis.
The sanctions include a fine of £14.4 million on KPMG, a severe reprimand, and an order to designate an independent review to assess the efficiency of the auditor's current accounting policies.
Related: PwC Rejects Audit & Consulting Split, Forecasts Record Annual Revenue Of $50B
KPMG was fined £20 million, reduced to £14.4 million because it cooperated and admitted wrongdoing.
The auditor also agreed to pay £3.95 million to cover fees related to the executive counsel investigation and the independent disciplinary tribunal.
"Misconduct that deliberately undermines the FRC's ability to monitor and inspect the effectiveness of audits is extremely serious because it obstructs the FRC's ability to protect the public interest," said executive counsel Elizabeth Barrett.
Photo by tingey-injury via Unsplash