KPMG to be fined £14m for forging documents and misleading FRC
KPMG will pay one of the largest fines in UK audit history, after former staff forged documents and misled the regulator over audits for companies including the collapsed outsourcer Carillion.
The Financial Reporting Council (FRC) – which regulates accountants – confirmed the £14.4m settlement at a London tribunal hearing on Thursday, and said KPMG would also face a “severe reprimand” over the “extremely serious” misconduct related to employees’ false representations to the watchdog.
The fine relates to misleading information provided to the FRC as part of audit quality reviews (AQR) meant to confirm the integrity of audits conducted for both Carillion and the software firm Regenesis between 2014 and 2016. The tribunal upheld allegations by the FRC that KPMG and former staff created false meeting minutes, and retroactively edited spreadsheets, before sharing those documents with the FRC.
Mark Ellison QC, who was representing the FRC on the first of the two-day tribunal hearing, said KPMG’s total fine for would have been worth £20m – the largest fine on record, ahead of the £15m fine issued to Deloitte in 2020 over its historic audits of software company Autonomy – but the figure was reduced to £14.4m to reflect the accounting firm’s cooperation and willingness to admit guilt.
“The misconduct found in this case is extremely serious,” Ellison told the tribunal. “It cuts at the very heart of the protection of the public interest in the respondents’ regulator, the FRC. It was misconduct deliberately aimed at deceiving AQR inspectors appointed by the FRC.”
The settlement is the latest in a long-running saga related to the FRC’s investigation into the events surrounding Carillion’s failure in January 2018, which subsequently
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