KPMG hit with £2.1m fine for misconduct on Ted Baker audit
KPMG has been fined £2.1m by the accountancy watchdog over its audit of fashion retailer Ted Baker.
The Financial Reporting Council (FRC) has fined and “severely reprimanded” the accountancy giant following its admission of misconduct in relation to the audits between January 2013 and January 2014.
Senior statutory auditor Michael Barradell has also been fined £80,000 – reduced to £46,000.
The Misconduct arose from KPMG providing expert witness services to Ted Baker in a Commercial Court claim, which the FRC said compromised the auditor's independence and was in breach of ethical standards.
Interim executive counsel at the FRC, Claudia Mortimore, said: “Ethical standards are critical in supporting the confidence that third party users can reasonably have in financial statements in circumstances where, of necessity, they only have incomplete information to judge whether the auditor is in fact objective.
“Where those standards are breached such that the auditor's independence is lost, user confidence is likely to be undermined; the FRC makes clear by these sanctions the seriousness with which such breaches and their consequences are viewed.”