KPMG and chief operating officer fined over ethical standards breach
KPMG and its chief operating officer James Marsh have been fined by the Financial Reporting Council for breaching ethical standards
The auditing firm and its executive were taken to tribunal over Marsh's failure to sell shares in Cable and Wireless Worldwide when he became a partner of KPMG in 2011.
The telecoms giant, where Marsh had previously “been in a position to exert significant influence over the financial statements” was a client of the Dutch financial firm.
The tribunal agreed this was a form of misconduct, and fined Marsh £60,000, though this has been reducd to £39,000 to reflect his admissions.
KPMG was fined £350,000, though this was similarly reduced to £227,000. In addition KPMG agreed to pay the majority of the FRC’s costs.
Paul George, executive director of conduct at the FRC, said: “I welcome the sanctions imposed by the tribunal in these matters which serve to emphasise the central importance of the ethical standards for auditors to the audit process.
“As the tribunal observes, they are at the very heart of trust in the audit process on which public confidence in capital markets and the conduct of public entities depends.”