Clarity lacking in tribunal report on KPMG’s Carillion, Regenersis failings
The release of the independent tribunal report into the misconduct of KPMG and five of its former employees for falsifying information in the audits of Carillion and Regenersis provides further details about how the work was doctored—but not why.
The report, published Tuesday by the U.K. Financial Reporting Council (FRC), is also meant to spell out how the regulator reaches enforcement decisions and disciplines noncompliance, but the sanctions against the firm compared to its employees seem notably disproportionate.
KPMG self-reported its concerns to the FRC that auditors working on audit quality reviews (AQRs) for Carillion and Regenersis created false minutes and tampered with spreadsheets and lied about it. The firm subsequently admitted misconduct and cooperated with the FRC’s investigation, resulting in its fine being reduced from 20 million pounds to £14.4 million (then-U.S. $17.4 million) when the FRC announced its penalties in July.