Entain PLC (LSE:ENT) accountant KPMG is facing a probe into how it conducted the audit of the bookmaker’s 2022 numbers.
Regulatory body The Financial Reporting Council (FRC) said it had launched an investigation into KPMG’s work on Entain’s accounts for the year
A KPMG spokesman said: “We will cooperate fully with the FRC to conclude this matter as quickly as possible.”
KPMG has been Entain’s auditor since 2018.
The Ladbrokes and Corals appointed Gavin Issac as its new chief executive in 2024 after it paid £615 million to settle an HMRC investigation into alleged bribery at a former Turkish subsidiary in 2017.
KPMG, one of the UK’s big four accountancy firms, was fined £21 million for its audits at Carillion ahead of the contractor’s collapse.
Entain declined to comment to PA on the investigation into KPMG.
Shares in Entain dropped 1.7% to 658.4p.
Analysts at Peel Hunt said "it is hard to know if the investigation is price-sensitive or material" and until there is more information, analysts "expect the market to assume that it is, and for the share price to see some weakness".
"However, it was only on 13 January that Entain confirmed its guidance for FY24, and we take some comfort from the fact that gambling is an almost entirely cash business so there should not be uncertainty over judgements relating to, for example, the value of long-term contracts or asset values."
** Update: adds broker comments **