KPMG hit with £4.5m fine over Quin­dell au­dit

Belfast Telegraph - Business Telegraph - - Employment News - BY STAFF RE­PORTER

KPMG has been fined £4.5m by the ac­coun­tancy watch­dog over its au­dit of in­sur­ance firm Quin­dell.

The Fi­nan­cial Re­port­ing Coun­cil said it has also or­dered KPMG’S au­dit en­gage­ment part­ner, Wil­liam Smith, to pay £120,000.

KPMG’S fine was dis­counted for set­tle­ment to £3.15m and Mr Smith’s knocked down to £84,000.

It fol­lows an ad­mis­sion of mis­con­duct in re­la­tion to the au­dit of the fi­nan­cial state­ments of Quin­dell for the pe­riod ended De­cem­ber 31 2013, the FRC said.

Quin­dell, now Watch­stone, was rocked by a se­ries of scan­dals in 2015 and was also in­ves­ti­gated by the Se­ri­ous Fraud Of­fice.

Its shares surged be­tween 2012 and early 2014 — valu­ing it at £2.7bn — but stock then plunged amid short-sell­ing and af­ter a US hedge fund pub­licly ques­tioned the firm’s busi­ness model. Its shares were later sus­pended af­ter the Fi­nan­cial Con­duct Au­thor­ity launched a probe into its ac­counts and founder Rob Terry.

The FRC said: “The mis­con­duct re­lated to two au­dit ar­eas and in­cluded fail­ure to ob­tain rea­son­able as­sur­ance fi­nan­cial state­ments were free from ma­te­rial mis­state­ment, fail­ure to ob­tain suf­fi­cient ap­pro­pri­ate au­dit ev­i­dence and fail­ure to ex­er­cise suf­fi­cient pro­fes­sional scep­ti­cism.”

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