The Financial Reporting Council, the U.K.’s accounting watchdog, announced Tuesday the launch of investigations into Big Four firms KPMG and PwC concerning the audits of U.K. logistics company Eddie Stobart Logistics.
The FRC said it has commenced the investigations into the audits of Eddie Stobart Logistics for the year ended Nov. 30, 2017, regarding the KPMG audit, and for the year ended Nov. 30, 2018, regarding the PwC audit. The investigations will be conducted by the FRC’s Enforcement Division.
Eddie Stobart Logistics suspended trading of its shares last year after a review conducted by former Chief Financial Officer Anoop Kang found the company’s 2018 adjusted operating profit was overstated by about £2 million (U.S. $2.46 million). The scandal further led CEO Alex Laffey to step down.
In a statement, a KPMG spokesperson said, “We will cooperate fully with the FRC to conclude this matter as quickly as possible.”