- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2023-10-12T18:43:00
KPMG accepted the conclusions and record penalties levied against it by the U.K. Financial Reporting Council (FRC) on Thursday for the “exceptional” level of deficiencies found to have taken place during the Big Four audit firm’s work at collapsed construction company Carillion over a period of several years.
The FRC handed down fines totaling 21 million pounds (U.S. $25.7 million) across two separate decisions against KPMG regarding its Carillion failings. The first decision, related to the audits of Carillion’s financial statements for the fiscal years 2014-16 and additional work in 2017, included a penalty of £26.5 million (U.S. $32.4 million), discounted to more than £18.5 million (U.S. $22.6 million) for cooperation and admissions. The second decision, against affiliate KPMG Audit and related to certain transactions linked to Carillion’s 2013 financials, included a £3.5 million (U.S. $4.3 million) penalty, discounted to about £2.5 million (U.S. $3.1 million).
The FRC also required KPMG to pay more than £5.3 million (U.S. $6.5 million) in investigation costs related to both decisions.
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KPMG agreed to pay a reduced penalty of nearly £1.5 million (U.S. $1.9 million) assessed by the U.K. Financial Reporting Council addressing admitted failings in the Big Four audit firm’s financial year 2018 work at advertising services company M&C Saatchi.
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