FRC fines KPMG 1.25 mln pounds for Revolution Bars audit failures (updated)

Carillion

08/03/2022 09:52

(Adds KPMG comment, details)
    LONDON, March 8 (Reuters) - Britain's Financial Reporting
Council said on Tuesday it had fined accounting firm KPMG 1.25
million pounds ($1.64 million)for its part in the sub-standard
auditing of Revolution Bars Group plc.
    The KPMG fine has been adjusted to 875,000 pounds in view of
undisclosed "aggravating and mitigating factors" and its
co-operation with the investigation. KPMG will also pay the
executive counsel's costs.
    The FRC said KPMG and its audit engagement partner Michael
Neil Frankish, who left KPMG in 2016, accepted failures in their
work related to supplier rebates, share-based payments, and
deferred tax for the operator of premium bars which had only
listed on the London Stock Exchange's main market in 2015.
    KPMG said it regrets that aspects of its 2015 and 2016
audits of Revolution Bars fell short of required standards and
it is committed to dealing with, and learning from, its historic
cases.
    "We continue to invest significantly in our business, taking
action to address the FRC’s findings and have made significant
improvements... including in respect of supplier rebates, share
based payments and deferred tax," KPMG said.
    In determining sanctions to be imposed, the FRC has taken
into account that these were serious breaches but were not
intentional, dishonest, deliberate or reckless.
    The firm was sanctioned alongside Frankish, who was also
fined 50,000 pounds, adjusted to 35,000 for aggravating and
mitigating factors and discounted for co-operation with the FRC
investigation.
    Frankish had no comment.
    The FRC has imposed several hefty fines on KPMG in recent
years, though they could be dwarfed by any potential sanction
for its audit of collapsed builder Carillion, which the watchdog
has investigated but has yet to make public the outcome.
    ($1 = 0.7638 pounds)

 (Reporting by Sinead Cruise and Huw Jones; editing by Carolyn
Cohn, editing by Ed Osmond)
 ((sinead.cruise@thomsonreuters.com; 020 7513 5026; Reuters
Messaging: sinead.cruise.thomsonreuters.com@reuters.net))