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The Financial Reporting Council (FRC) has launched an investigation into the audit conducted by KPMG of the consolidated financial statements of Carr’s Group for the period ended 28 August 2021.
The announcement comes as the council came to the decision to investigate the accountant firm at a conduct committee meeting on 20 March 2023.
While the FRC states that the investigation does not relate to any person other than the relevant statutory auditors, it has confirmed that the investigation into KPMG will be carried out by its enforcement division under the audit enforcement procedure.
A spokesperson for KPMG UK said: “We note the announcement from the FRC regarding commencement of an investigation into the audit of Carr’s Group for the year ended 28 August 2021. We will cooperate fully with the FRC to conclude this matter as quickly as possible.”
After KPMG’s time as the group’s auditor in 2021, Carr’s Group had appointed Grant Thornton to audit its financial statements for 2022.
The agriculture and engineering services provider announced in January that its shares were halted by the Financial Conduct Authority (FCA) due to a delay in the publishing of its 2022 results.
Carr’s Group subsequently published its annual report on 23 March and had its trading restored on 29 March, noting that it had also made two prior-year restatements to revenue recognition.
As a result, the restatement showed increases to revenue and adjusted profit after tax in the year ended 28 August 2021.
This is the latest FRC investigation into KPMG’s audits, as the firm recently agreed to pay £875k as part of a settlement with the council for breaches in its 2016 audit of lighting and wiring product distributor Luceco.
