Big UK audit firms facing 15 probes

the industry watchdog is probing Britain’s biggest bean-counters over 15 botched audits.

accountants at major firms such as KPMG, Deloitte and Pwc face investigations from the financial reporting council (frc), which is desperately attempting to prove it is up to the task of regulation.

It has now opened a fresh investigation into KPMG, which is already being scrutinised in five cases, for alleged misconduct relating to the work it did for mattress company Silentnight.

It is claimed that KPMG and one of its partners, David costley-Wood, accepted the job when their professional judgement was compromised.

the frc also alleges that KPMG and costley-Wood were involved in misleading claims made by Silentnight to regulators and trustees over its pension fund. the case will go to a tribunal.

In previous cases where misconduct has been proven, firms have been slapped with multi-million pound fines and individuals banned from the accounting profession.

a KPMG spokesman said: ‘We believe the frc’s allegations to be wholly without merit.’

Before its collapse, Silentnight was promoted by celebrities including Myleene Klass (pictured). But in early 2011, it was struggling under cash flow pressure and a hefty pension deficit.

It called in KPMG, which proposed a so-called company Voluntary arrangement, where Silentnight would agree with its lenders to pay back a portion of its debt over a longer period.

however that fell through when the Pensions regulator and the Pension Protection fund refused to support it, and KPMG was appointed administrator. eventually, Silentnight was sold to private equity firm HIG capital.

the frc, which announced a probe into scandal-ridden bakery chain Patisserie Valerie this week, is trying to throw off criticism for being ineffective.

MPs called the watchdog toothless after it failed to hold any audit firms to account over financial statements they rubber-stamped for banks which came close to collapse during the financial crisis. Sir John Kingman is leading a Government-commissioned review of whether the frc should be scrapped.