KPMG Sanctioned and Fined £14M

The Financial Reporting Council (FRC) today announces sanctions against KPMG LLP (KPMG), a former KPMG partner and four former KPMG employees, following an investigation undertaken pursuant to the Accountancy Scheme. The investigation related to the provision of false and misleading information and documents to the FRC in connection with the FRC’s Audit Quality Reviews of two audits carried out by KPMG: the audit of the financial statements of Regenersis plc for the period ended 30 June 2014 (“the Regenersis audit”); and the audit of the financial statements of Carillion plc for the period ended 31 December 2016 (“the Carillion audit”). 

An independent Disciplinary Tribunal made findings of Misconduct following a five-week hearing during 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.

Sanctions

KPMG has been:

• fined £20 million, reduced to £14.4 million to reflect KPMG’s self-reporting, co-operation, and admissions;
• severely reprimanded; and
• ordered to appoint an independent reviewer to conduct a review to consider the effectiveness of KPMG’s current AQR policies and procedures in supporting high quality engagement with the AQR inspectors.

 
Mr Meehan has been excluded from membership of the ICAEW for a period of 10 years, and fined £250,000.

Mr Wright has been excluded from membership of the ICAEW for a period of 8 years, and fined £45,000.

Mr Bennett has been excluded from membership of the ICAEW for a period of 8 years and fined £40,000.

Mr Kitchen has been excluded from membership of the ICAEW for a period of 7 years, and fined £30,000.

Mr Paw was severely reprimanded.

Costs

KPMG agreed to pay £3.95 million towards Executive Counsel’s costs of the investigation together with the costs of the Tribunal.

 

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