The Financial Reporting Council has issued a £1.3m fine to auditing giant KPMG and one partner
(Picture: PA Archive / Liam McBurney/PA)Accounting giant KPMG and one of its directors have been fined a total of £1.3 million for “serious” failings within their audits of Revolution Bars Group, just two months after another major penalty.
The Financial Reporting Council said the failings of the firm and director Michael Neil Frankish related to three main areas of the 2015 and 2016 audits, including supplier rebates -- an area that the FRC had warned posed "particular audit risk" prior to the errors with Revolution being made.
The watchdog also found errors in relation to listing fees, share-based payments and, within the 2016 statement only, problems linked to deferred taxation.
Revolution listed on the London Stock Exchange in March 2015 at 200p per share, but the stock has fallen nearly 90% in that time to just over 18p.
The FRC said the 2015 and 2016 Revolution accounts contained “various misstatements”, some of which were “material”.
Due to mitigating circumstances, notably that the breaches were “serious but not intentional”, KPMG’s fine was reduced from £1.25 million to £875,000, while Frankish’s penalty was cut from £50,000 to £35,000.
Jamie Symington, deputy executive counsel to the FRC, said KMPG’s failings in this case “persisted for two years and across multiple areas”.
“The audit client was a newly listed and relatively small company, but the breaches were nevertheless serious, including lack of professional scepticism,” he said.
Symington added the FRC required KPMG to “take action to mitigate or prevent breaches recurring”.
This latest scolding comes less than two months after KPMG was fined £3 million over failings in its audits of collapsed drinks business Conviviality. That fine led KPMG’s boss John Holt to publicly apologise.
KPMG was also fined a near record £13 million last year for its work on the sale of mattress maker Silent Night to private equity in 2011. It has faced fines for poor audit work at Ted Baker, BNY Mellon and Quindell among others in recent years.
