REG - Financial RepCouncil - Tribunal report following sanctions against KPMG

CarillionAnnouncement

27/09/2022 08:15

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RNS Number : 8038A  Financial Reporting Council  27 September 2022

Publication of the report of the Disciplinary Tribunal following sanctions
against KPMG LLP and others in connection with Audit Quality Reviews of
Regenersis & Carillion audits

 

 
 
         27 September 2022

 

The FRC has today published the report of the Independent Disciplinary
Tribunal
(http://www.frc.org.uk/document-library/enforcement/2022/kpmg-regenersis-and-carillion-aqr-tribunal-report)
detailing its findings of Misconduct by KPMG LLP (KPMG) a former KPMG partner
and four former KPMG employees (the Respondents), 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; and the audit of the financial statements of Carillion plc
for the period ended 31 December 2016.

 

The FRC announced the Tribunal's Misconduct findings and sanctions on 25 July
2022
(https://www.frc.org.uk/news/july-2022/sanctions-against-kpmg-and-others-in-connection-wi)
.

 

The Tribunal Report, which has been edited for publication, details the
reasons why the Tribunal considered the Misconduct which included findings of
dishonesty on some matters and findings of lack of integrity on others, to be
serious. It sets out the detail of the Tribunal's conclusions on the facts and
evidence which underpin its findings of Misconduct against each individual.
It also explains the Tribunal's approach and its reasons for arriving at the
sanctions which it considered appropriate to impose on the Respondents in the
circumstances of this case.

 

The Report describes as impressive KPMG's actions on identifying the issues
which gave rise to the proceedings. These actions included bringing the matter
to the attention of the FRC, following consultation with the FRC conducting
three separate reviews at an early stage, admitting responsibility for the
acts of the individuals, and later admitting in advance of the Tribunal
hearing that Misconduct had occurred and expressing contrition. These strong
mitigating features served to reduce the sanctions that might otherwise have
been imposed on KPMG.

 

The Tribunal report is available here
(http://www.frc.org.uk/document-library/enforcement/2022/kpmg-regenersis-and-carillion-aqr-tribunal-report)
.

 

Notes to editors:

 

1.       The FRC's purpose is to serve the public interest by setting
high standards of corporate governance, reporting and audit and by holding to
account those responsible for delivering them. The FRC sets the UK Corporate
Governance and Stewardship Codes and UK standards for accounting and actuarial
work; monitors and takes action to promote the quality of corporate reporting;
and operates independent enforcement arrangements for accountants and
actuaries. As the competent authority for audit in the UK the FRC sets
auditing and ethical standards and monitors and enforces audit quality.

 

2.       Past FRC Enforcement Outcomes
(https://www.frc.org.uk/getattachment/e36b6e72-6f11-46bb-bdc7-ca6d56aa5a73/Enforcement-sanctions-imposed-against-Audit-firms-and-Audit-partners_Links.pdf)
can be found here.

 

3.       The FRC is the independent, investigative and disciplinary body
for accountants and actuaries in the UK dealing with cases which raise
important issues affecting the public interest. In brief, the stages of the
disciplinary process under the Accountancy Scheme are:

·    Decision to investigate

·    Investigation

·    Decision whether to bring enforcement proceedings against Member Firm
or Member and, if so decided, referral to Disciplinary Tribunal

·    Tribunal hearing

·    Determination and imposition of sanction and/or costs orders

 

Under the Accountancy Scheme the FRC can start a disciplinary investigation in
one of two ways: (i) the professional bodies can refer cases to the FRC; and
(ii) the FRC may decide of its own accord to investigate a matter. The Conduct
Committee will consider each case identified or referred to it and decide
whether or not the criteria for an investigation are met.

The criteria are specified in paragraph 5(1) of the Accountancy Scheme. A
Member or Member Firm shall be liable to investigation under this Scheme only
where, in the opinion of the Conduct Committee the matter raises or appears to
raise important issues affecting the public interest in the United Kingdom and
there are reasonable grounds to suspect that there may have been Misconduct or
it appears that the Member or Member Firm has failed to comply with any of his
or its obligations under paragraphs 14(1) or 14(2) of the Scheme.

Investigations are conducted by Executive Counsel and the Enforcement
division.

 

4.       All media enquiries should be directed to the FRC
communications team:

·    Kate O'Neill, Director of Stakeholder Engagement and Corporate
Affairs, on telephone 07714415229 or email: k.oneill@frc.org.uk
(mailto:k.oneill@frc.org.uk) .

·    William Boyack, Senior Communications Manager, on telephone: 020 7492
2307/ 07480 210166 or email: w.boyack@frc.org.uk (mailto:w.boyack@frc.org.uk)
.

 

5.       If you no longer wish to receive press releases from the FRC
please email unsubscribe@frc.org.uk (mailto:unsubscribe@frc.org.uk) .

 

 

 

 

 

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