KPMG hit by half of all audit watchdog fines

ACCOUNTING firm KPMG was on the receiving end of half of all fines issued by the audit watchdog this year.

The Big Four firm and its partners were hit with penalties of £16.4m out of £32.2m for the whole industry.

The fines, which were for botched audits at investment bank BNY Mellon, Co-op Bank and a Lloyd’s of London insurance syndicate, were reduced to a total of £13.9m for early resolution of the cases.

The hefty fines have contributed to a difficult year for KPMG. It has also faced accusations of “bullying” and been hit by a 14pc fall in profits in the UK to £307m in the 12 months to September.

The slide triggered an average pay cut of £50,000 per partner.

In a bid to cut ballooning costs, the firm launched a £100m cost-cutting drive named Project Zebra. The cutbacks included the recall of hundreds of staff mobile phones and the laying off of one third of the firm’s secretaries and personal assistants.

The firm is also the subject of several ongoing investigations, including into its audits of government contractor Carillion which fell into insolvency almost two years ago, and collapsed drinks retailer Conviviality.

KPMG said this month it had hired over 700 experienced auditors and pumped £23m into training. A KPMG spokesman declined to comment.