Big Four

KPMG to be hit with £4m fine over Rolls-Royce audit

Sky News said the FRC launched its investigation into KPMG soon after Rolls-Royce’s deferred prosecution agreement with the Serious Fraud Office was announced

KPMG UK will reportedly be hit with an approximately £4.5m penalty regarding failings in its supervision of the accounts of Rolls-Royce Holdings, the aircraft engine manufacturer, according to Sky News.

The fine relates to the firm’s work on Rolls-Royce dating back more than ten years. In 2017, the engineering company paid more than £670m to settle bribery charges in the UK and US.

Sky News said the Financial Reporting Council (FRC) launched its investigation into KPMG soon after Rolls-Royce’s deferred prosecution agreement with the Serious Fraud Office was announced.

Additionally, the £4.5m penalty could potentially be delivered as soon as this week. However, the news outlet reported that the fine is expected to be discounted to reflect KPMG’s co-operation with the inquiry led by the FRC.

Meanwhile, KPMG was recently faced with a £14.4m fine on 12 May over its audit of Carillion after a tribunal found former members of its staff misled the FRC as part of audit quality reviews.

The regulator said the firm would also face a “severe reprimand” for the misconduct by certain employees, as the tribunal ruled that during the inspections KPMG auditors created false documents, including meeting minutes, spreadsheets and assessments of goodwill.

The regulator has also called for KPMG staff Alistair Wright, Richard Kitchen, and Adam Bennett to be excluded from the sector for 12 years and face a £100,000 fine. It also recommended Pratik Paw to face a four-year exclusion and a £50,000 fine.

The FRC also recommended that KPMG’s Peter Meehan be banned from the accounting and auditing sector for 15 years and face a fine of at least £400,000.

KPMG declined to comment on the fine.

Show More
Back to top button