Big four accountant KPMG has today been fined £4.5m over failings connected with its audit of scandal-hit insurance firm Quindell.
Accountancy regulator the Financial Reporting Council (FRC) levied the fine today after KPMG and audit engagement partner William Smith admitted misconduct in relation to the audit of the financial statements of Quindell for the period ended 31 December 2013.
The FRC reprimanded the firm and also issued it with a fine of £4.5m, which was discounted for settlement to £3.15m.
Smith was also reprimanded and received a £120,000 fine, discounted for settlement to £84,000.
A KPMG spokesperson said: “Audit quality, and professional scepticism in particular, is of paramount importance to our firm. We have cooperated fully throughout the FRC’s investigation, and have already updated our audit processes and procedures to address the areas of concern.
“We regret that some aspects of our audit for the year ended 31 December 2013 did not meet the required standards. As we stated in our audit opinion for the following year, certain information given to KPMG contradicted representations previously made by former members of management. Nonetheless, we accept the FRC’s findings that in two specific areas of the audit, our challenge for the year ended 31 December 2013 should have gone further.
“Due to open investigations by the FRC and SFO [Serious Fraud Office] into Quindell’s business and accounting practices we are unable to comment further.”