div classBodysc17zpet90 cdBBJodivpBy Kirstin Ridleyp
pLONDON Reuters – KPMG faces a 14.4 million pound 17.6 million fine after admitting it misled regulators during spot checks on audits of construction group Carillion and software firm Regenersis.pdivdivdiv classBodysc17zpet90 cdBBJodiv
pThe Financial Reporting Council FRC, the British auditing regulator, told a London tribunal on Thursday that it was seeking a record 20 million pound fine, reduced to 14.4 million pounds because KPMG selfreported and cooperated.p
p“It was unjustifiable and wrong,” KPMGs Chief Executive Jon Holt said in a statement, adding: “It was a violation of our processes and a betrayal of our values.”p
pKPMG, one of the Big Four auditors that dominate the market alongside EY, Deloitte and PwC, admitted to misconduct at an initial London tribunal in January and reiterated its apology at the start of a twoday hearing.p
p“I am saddened that a small number of former employees acted in such an inappropriate way, and it is right that they – and KPMG – now face serious regulatory sanctions,” Holt said.p
pThe tribunal found five former KPMG employees guilty of misconduct during a routine FRC inspection of a Regenersis audit to endJune 2014 and a Carillion audit to endDecember, 2016.p
pThe FRC, which is seeking to fine them between 50,000 pounds and 400,000 pounds and ban them from the profession for up to 15 years, alleged they provided false or misleading information or documents to the regulator.p
pThe five had contested the allegations.p
pThe tribunal will rule on sanctions at a later date.p
pBecause KPMG is liable for the conduct of its employees, it faced the same allegations.p
pThe proceedings did not delve into the underlying audit work. The FRC is separately investigating KPMGs audits of Carillion, whose collapse in 2018 led to recommendations of a sector shakeup, although legislation has yet to be brought before parliament.p
pKPMG has separately vowed to defend itself against a 1.3 billion pound 1.6 billion lawsuit by Carillions liquidators for missing “red flags”, in one of the largest claims against top accountants to date.p
p1 0.8185 pounds p
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pp Reporting by Kirstin Ridley Editing by Alexander Smithp
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