KPMG director fined $203 800 for misleading audit inspectors

The FRC is currently in the midst of a disciplinary hearing involving six former employees at the auditing giant.
Image: Simon Dawson/Bloomberg

A KPMG LLP boss said he was responsible for misleading the UK audit watchdog during an inspection of the financial statements of data services company Regenersis Plc.

Stuart Smith, a former audit director, took responsibility for misleading the Financial Reporting Council’s audit quality review and that he was “reckless” as to whether he was misleading inspectors, according to a statement from the watchdog announcing the settlement.

Smith was fined 150 000 pounds ($203 800) and will be excluded from the Institute of Chartered Accountants in England and Wales, the professional body, for three years.

The FRC is currently in the midst of a disciplinary hearing involving six former employees at the auditing giant. It opened an investigation after KPMG self-reported concerns related to an audit for collapsed Carillion Plc, and later widened it out to include Regenersis. KPMG admitted to the misconduct.

“This misconduct is a violation of our processes and clearly against our values,” Jon Holt, chief executive officer of KPMG, said in an emailed statement. “It is unacceptable, we do not tolerate or condone it in any way, and I am very sorry that it occurred in our firm.”

KPMG will learn what sanctions it faces once the disciplinary tribunal has finished.

© 2022 Bloomberg

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