The latest fines and sanctions revolve around an internal audit manager’s “forgery” of a key formula in a spreadsheet submitted to the Financial Reporting Council (FRC), which increased a materiality threshold. This eliminated audit scrutiny of contracts between £300,000 and £1.5m. A KPMG partner settled with inspectors and has been fined for “misleading” them about this change, which, according to FRC, was “contrary to his ICAEW professional accounting body’s code of ethics.”
The FRC continues to say sanctions on KPMG will be determined at the conclusion of their ongoing tribunal hearing on audits of Regenersis and Carillion. KPMG, which long ago self-reported to the FRC after its own investigation, has already admitted to misconduct in how the FRC was dealt with during spot checks of audits of Regenersis and Carillion.
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