- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Neil Hodge2022-09-28T11:54:00
The release of the independent tribunal report into the misconduct of KPMG and five of its former employees for falsifying information in the audits of Carillion and Regenersis provides further details about how the work was doctored—but not why.
The report, published Tuesday by the U.K. Financial Reporting Council (FRC), is also meant to spell out how the regulator reaches enforcement decisions and disciplines noncompliance, but the sanctions against the firm compared to its employees seem notably disproportionate.
KPMG self-reported its concerns to the FRC that auditors working on audit quality reviews (AQRs) for Carillion and Regenersis created false minutes and tampered with spreadsheets and lied about it. The firm subsequently admitted misconduct and cooperated with the FRC’s investigation, resulting in its fine being reduced from 20 million pounds to £14.4 million (then-U.S. $17.4 million) when the FRC announced its penalties in July.
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KPMG accepted the conclusions and record penalties levied against it by the U.K. Financial Reporting Council for the “exceptional” level of deficiencies found to have taken place during the Big Four audit firm’s work at collapsed construction company Carillion.
A former risk and compliance officer at National Westminster Bank was awarded nearly £88,000 (U.S. $112,000) after a U.K. employment tribunal found she was unfairly dismissed and discriminated against during her sick leave for colon cancer.
The United Kingdom introduced for debate corporate reporting reforms that would require the country’s largest companies to set out their risk management and resilience strategies as part of required annual reporting.
Top-of-mind issues addressed at Compliance Week’s Third-Party Risk Management & Oversight Summit, held June 3-4 in Atlanta, included safe deployment of artificial intelligence, assessing vendor viability and sustainability, understanding the role of procurement in risk ranking, the intersection (or lack thereof) between data privacy and cybersecurity, and many others.
Anne Morriss, co-author of “Move Fast and Fix Things,” advises compliance officers to tap into curiosity, communicativeness, and comfort with discomfort to build organizational trust, fast.
Regulators and government agencies often speak to the value of empowered corporate compliance programs to advancing their mission. Why not practice what they preach by empowering compliance among their own ranks?
