£600k payday for bosses of tainted audit giant KPMG

PARTNERS at the UK arm of auditor KPMG pocketed an average pay rise of £82,000, despite a string of scandals.

Its revenues in Britain surged 8pc to £2.3bn in the year to September 30 – the largest increase for a decade – as it did more work on big business deals.

Partners were handed an average £601,200 each, up 15.7pc on the previous 12 months. The best-paid partner, thought to be senior partner and chairman Bill Michael (pictured), took home £2.1m.

The payouts will infuriate critics of the Big Four accountants – which includes rivals PwC, Deloitte and EY – and come after a dismal year for its reputation. In total, KPMG and partners face six investigations by the Financial Reporting Council (FRC) watchdog.

Luke Hildyard, of the High Pay Centre, said: ‘This is the sign of a dysfunctional audit market. It can’t be right that an organisation can be involved in so many scandals and yet continue to rake in vast profits and lavish six-figure payouts. The payments will certainly keep the partners well plenished with champagne over Christmas, which might improve the quality of their audits.’

KPMG lost as many as 20 clients in South Africa after it was implicated in a corruption scandal which led to the resignation of president Jacob Zuma. In Britain, the FRC launched a probe into how KPMG failed to spot the impending collapse of FTSE 100 outsourcer Carillion in January, after 19 years of auditing its books in exchange for fees of £29m.

Regulators said half of KPMG’s audits in 2017-18 required more than limited improvements, up from 35pc in the previous year. They added: ‘The overall quality of the audits inspected, and indeed the decline in quality over the past five years, is unacceptable and reflects badly on the action taken by the previous leadership.’

The firm set aside £73m to pay for fines in its latest financial year, up from £56m for the previous 12 months. Penalties included a £3m fine for ethical breaches at fashion firm Ted Baker, and £4.5m for the audit of failed insurance technology company Quindell.

KPMG admitted in its annual report yesterday: ‘This year has presented significant challenges.

‘While we have a great deal to be proud of, we know there are things that we must do better.

‘The steps we took in previous years haven’t resulted in the necessary improvements to audit quality at the pace we’d hoped.’