Audit firm KPMG and one of its partners face a tribunal over work for mattress firm Silentnight, the accountancy watchdog said today.
The Financial Reporting Council (FRC) today delivered a formal complaint against the firm and restructuring partner David Costley-Wood.
The FRC alleged that KPMG and Costley-Wood acted for Silentnight “in circumstances where their professional judgment was compromised (or was likely to be compromised) and their objectivity was impaired (or was likely to be impaired).”
A spokesperson for KPMG said: "We believe the FRC's allegations to be wholly without merit. Given the matter is now subject to formal consideration by a tribunal, we will not be commenting further."
Earlier this year KPMG admitted misconduct in its work for US bank BNY Mellon and it is also being investigated by the FRC for its work for collapsed outsourcer Carillion.
KPMG’s woes are part of a wider examination of the audit sector with both the Competition and Markets Authority (CMA) and the Business, Energy and Industrial Strategy Committee carrying out investigations of the industry.
On Wednesday, the FRC said it was investigating accountancy firm Grant Thornton over its audit of bakery chain Patisserie Valerie, which nearly collapsed after a £40m hole was found in its accounts.
KPMG’s alleged misconduct relates for work carried out between January and April 2011.
The FRC’s investigation was launched in October 2015 following a referral from the Pensions Regulator.
The alleged wrongdoing relates to the then insolvent Silentnight’s rescue out of insolvency by private equity firm HIG Capital in 2011.