Big Four

FRC issues formal KPMG complaint over false information allegations

The targets of the complaint, which comes under the accountancy scheme, also include a former KPMG partner, as well as current and former KPMG employees

The Financial Reporting Council (FRC) has issued a formal complaint against KPMG over allegedly false and/or misleading information provided in the audit quality inspections of Carillion and Regenersis.

The targets of the complaint, which comes under the accountancy scheme, also include a former KPMG partner, as well as current and former KPMG employees.

It comes in relation to the provision of supposed false and misleading documents to the FRC for both Carllion’s audit for the period ended 31 December 2016, and Regenersis’ for the period ended 30 June 2014.

First opened in November 2018, the watchdog’s Carillion audit investigation was expanded in July 2019 to include the Big Four firm’s Regenersis audit.

Following the formal complaint, a disciplinary tribunal has been scheduled to commence on 10 January 2022 to determine “whether or not the respondents have committed misconduct”.

The individuals included in the allegations are Peter Meehan, KPMG’s engagement partner for the Carillon audit, and Stuart Smith, who held the same role in the Regenersis audit.

The FRC said that these individual allegations are made “only in respect of their own conduct”, meaning that it will not suggest any misconduct of any other individual.

A spokesperson for KPMG UK told the Financial Times: “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.”

Accountancy Today has contacted KPMG for further comment.

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