KPMG, one of the big four auditors, has been hit with a £1.25mln fine for doing a shoddy job on the accounts of Revolution Bars Group PLC (AIM:RBG).
The Financial Reporting Council (FRC) slapped yet another fine on KPMG but agreed to reduce the size of the fine to £875,000 in view of "aggravating and mitigating factors" and the auditor’s co-operation in the FRC’s investigation.
The FRC said KPMG fell short of standards in its 2015 and 2016 audits of the bars operator's results. KPMG and its former audit engagement partner Michael Frankish accepted they had failed to spot errors or misrepresentations in respect of supplier rebates, share-based payments, and deferred tax.
"We continue to invest significantly in our business, taking action to address the FRC’s findings and have made significant improvements," KPMG said.
The FRC said the breaches were serious but it believed they were not intentional, dishonest, deliberate or reckless.
KPMG was fined £13 million last year for sloppy work on the sale of mattress maker Silent Night to private equity in 2011 and has also suffered fines for its work advising Ted Baker, BNY Mellon (NYSE:BK) and Quindell, while we are still awaiting the outcome of the FRC’s investigation into its audit of Carillion, the contractor that spectacularly collapsed into administration in January 2018.
KPMG is facing a £1.3bn negligence claim from Carillion’s creditors who claim the auditor missed several red flags before the construction firm collapsed. The FRC is also looking into KPMG’s auditing work on the software company Regenersis in 2014.