Disciplinary tribunal hearing of the formal complaint against KPMG to begin in January
The hearing of the formal complaint of the Executive Counsel to the Financial Reporting Council (FRC) under the Accountancy Scheme against KPMG, a former KPMG partner, and certain current and former KPMG employees will begin on 10 January 2022.
The Formal Complaint alleges Misconduct against KPMG and several individual Respondents regarding the provision of allegedly false and misleading information and/or 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 Carillion plc for the period ended 31 December 2016 and the audit of the financial statements of Regenersis plc for the period ended 30 June 2014.
The allegations in the Formal Complaint are made against each of the individuals only in respect of their own conduct and do not suggest that any individual was responsible for the Misconduct of any of the other individuals subject to the Formal Complaint.
The Formal Complaint does not allege Misconduct in the performance of the relevant audits, nor does it allege that in either case the financial statements had not been properly prepared. The audit, and preparation, of the 2016 Carillion financial statements are the subject of separate investigations, as announced on 29 January 2018 and 19 March 2018 respectively.
The FRC’s investigation was opened in November 2018 after KPMG had self-reported certain matters relating to the review of the 2016 Carillion audit.
The scope of the investigation was expanded in July 2019 to include the review of the 2014 Regenersis audit after KPMG had self-reported certain matters relating to that review. The Formal Complaint was issued on 15 March 2021.
An independent Disciplinary Tribunal will hear the Formal Complaint and determine whether or not the Respondents committed Misconduct.
A KPMG UK spokesperson told Scottish Financial News: “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.”