KPMG controversies
Controversies tied to this brand in public sources. A listing is not a finding of fault.
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2022
Carillion and Regenersis regulatory sanctions
The Financial Reporting Council found misconduct involving false or misleading information and documents connected with KPMG’s regulatory audit reviews of Carillion and Regenersis. KPMG received a severe reprimand, a £14.4 million fine and an order to pay costs; individual former personnel also received sanctions.
2022
KPMG reaches settlement concerning Regenersis work
Settlement
The U.K. Financial Reporting Council announced a settlement with KPMG concerning the firm’s work at software company Regenersis. The source does not provide further settlement terms.
Source excerpt
The U.K. Financial Reporting Council (FRC) this week announced sanctions against KPMG regarding its audits at now-collapsed alcohol retailer Conviviality, in addition to a settlement with the Big Four firm concerning its work at software firm Regenersis.
2022
FRC sanctions KPMG over Conviviality audits
Fine or penalty
The U.K. Financial Reporting Council announced sanctions against KPMG, including a severe reprimand and a reduced £3 million penalty, for breaches in its audits of Conviviality’s financial statements for fiscal years 2017 and 2018.
Source excerpt
KPMG received a “severe” reprimand and reduced penalty of 3 million pounds (U.S. $4.1 million) for breaches that arose in its audits of Conviviality’s financial statements for the fiscal years (FY) ended April 30, 2017, and April 29, 2018, the FRC announced Wednesday.
The Financial Reporting Council (FRC) said there were ‘serious’ failings in reviews of the hospitality group’s accounts.
KPMG has apologised after being fined £3million for botching Conviviality’s audits.
2021
Serba Dinamik sues KPMG over alleged audit negligence
Lawsuit filed
Serba Dinamik filed a writ of summons and statement of claim against its external auditor KPMG, alleging negligence in the audit process. The filing constitutes a legal action initiated by the company against its auditor. According to the source, KPMG's position on the matter is not reported. The available information does not include further details on the claims, the response of the auditor, or any subsequent developments in the case.
Source excerpt
Serba Dinamik said in a statement to Bursa that that company yesterday filed in the Shah Alam High Court the writ of summons and statement of claim against KPMG.
Serba Dinamik said the circumstances leading to the filing of the writ of summons and statement of claim were based on the company’s contention that KPMG had failed and neglected its role to complete the audit report until and unless a third-party independent reviewer is appointed and complete the findings raised by the external auditor.
2021
KPMG fined over advisory role in Silentnight sale
Fine or penalty
The U.K. accounting watchdog ordered KPMG to pay a £13 million fine for breaches of integrity and objectivity in its advisory role regarding the 2011 sale of Silentnight. The regulator also severely reprimanded KPMG and ordered it to appoint an independent reviewer.
Source excerpt
The U.K.’s accounting watchdog Thursday ordered KPMG to pay a £13 million (U.S. $18 million) fine for “breaches of the principles of integrity and objectivity” in its advisory role regarding the 2011 sale of mattress company Silentnight to U.S. private equity firm HIG Capital.
The Financial Reporting Council (FRC) announced it had “severely reprimanded” KPMG and ordered the Big Four firm to appoint an independent reviewer to determine the root cause of its alleged failings.
2020
KPMG Fined over Audit Breaches
Fine or penalty
In 2020, the UK's Financial Reporting Council fined KPMG over audit breaches. According to the regulator, the firm failed to obtain and document sufficient audit evidence concerning supplier-funded rebates. The Financial Reporting Council stated that the breaches were limited and did not call into question the truth or fairness of the audited company's financial statements. The event was reported as a fine imposed on KPMG in connection with these audit deficiencies.
Company response
Clarification — KPMG
"As the FRC makes clear, there is no question as to the truth and fairness of the financial statements," KPMG said in a statement.
Source excerpt
In the latest case, the watchdog said KPMG failed to obtain and document sufficient audit evidence in relation to supplier-funded rebates.
But the FRC said the breaches were limited in nature and did not call into question the truth or fairness of the company's financial statements.
Britain's accounting watchdog fined KPMG and a senior partner for failing to challenge what a client was telling them about certain complex supplier arrangements.
2020
FRC launches investigations into KPMG and PwC audits
Investigation
The Financial Reporting Council launched investigations into KPMG and PwC over their audits of Eddie Stobart Logistics plc for the years ended 30 November 2017 and 30 November 2018, respectively.
Company response
Ongoing disclosure — KPMG
A spokesman for KPMG said: “We will cooperate fully with the FRC to conclude this matter as quickly as possible.”
Ongoing disclosure — PwC
A PwC spokesman said: “We will cooperate fully with the FRC in this investigation.
Source excerpt
The Financial Reporting Council on Tuesday said it has launched investigations into KPMG and PwC over the audits of Eddie Stobart Logistics.
A PwC spokesman said: “We will cooperate fully with the FRC in this investigation.
A spokesman for KPMG said: “We will cooperate fully with the FRC to conclude this matter as quickly as possible.”
2018
Carillion audit scrutiny
KPMG’s role as auditor of collapsed UK construction company Carillion was investigated by regulators and Parliament. A parliamentary inquiry criticized the firm’s involvement in Carillion’s financial reporting, while subsequent regulatory proceedings examined alleged misconduct in audit work and information supplied to the regulator.
2017
PCAOB inspection-information scandal
KPMG US dismissed several audit partners after an investigation found that confidential information about planned PCAOB inspections had been obtained and shared. The episode raised questions about audit ethics, inspection integrity and the firm’s quality-control environment.
2015
Canadian offshore tax-avoidance dispute
The Canada Revenue Agency challenged a KPMG-linked Isle of Man tax structure, alleging that it was a sham designed to assist clients in avoiding tax. The matter contributed to broader scrutiny of professional firms’ involvement in offshore tax planning.
2014
Luxembourg Leaks tax-arrangement controversy
Documents disclosed through Luxembourg Leaks included tax rulings and structures negotiated by KPMG for multinational companies. The disclosures intensified public and political debate over aggressive tax planning, the role of professional advisers and the use of Luxembourg entities by international groups.
2012
Microsoft Puerto Rico tax-structure scrutiny
KPMG advised on a structure involving Microsoft intellectual property and a Puerto Rico operation that produced an extremely low effective tax rate. The Internal Revenue Service later challenged the arrangement and examined the flow of profits through the structure.
2008
HBOS audit and Reading fraud scrutiny
Following the rescue of HBOS by Lloyds Banking Group, KPMG’s audit role was examined in relation to the bank’s Reading branch fraud and wider reporting issues. The Financial Reporting Council later concluded that there was not a realistic prospect of an adverse tribunal finding that KPMG’s work had fallen significantly below required standards.
2005
U.S. tax-shelter fraud and deferred prosecution agreement
KPMG LLP admitted criminal wrongdoing involving the design, promotion and implementation of fraudulent, unregistered tax shelters for wealthy clients. The U.S. Department of Justice stated that the schemes generated billions of dollars in purported tax losses. KPMG agreed to pay US$456 million in fines, restitution and penalties under a deferred-prosecution agreement; the criminal charge was later dropped after the agreement’s conditions were met.