KPMG and PwC slapped with fines of almost £3m for botched Eddie Stobart audits
Big four accountancy firms PwC and KPMG have been fined a total of nearly £3m over botched audits of logistics giant Eddie Stobart in 2017 and 2018.
The Financial Reporting Council (FRC) said this morning it would fine PwC £1.99m and partner Philip Storer £51,000, with both receiving a “severe reprimand.”
KPMG received a fine of £877,000 with former partner Nicola Quayle, who ceased auditing in 2020, ordered to pay £45,500.
Both the firm and Quayle received severe reprimands, with the FRC noting that Quayle’s seniority and past disciplinary record were “notable aggravating factors,” in the decision.
The FRC, which announced earlier this year it is moving its offices to near Birmingham, said that PwC’s and partner Storer’s fines were reduced due to “exceptional cooperation” with the investigation.
KPMG had first performed its audit of Eddie Stobart in 2017, before a breakdown in relationship with the company saw PwC take over in 2018.
The following year, the logistics group – one of the UK’s most well-known trucking brands – saw its shares suspended between August 2019 and 2020, when the -then finance chief Anoop Kang discovered a £2m accounting-based error.
That same year, the firm narrowly avoided bankruptcy.
Both KPMG and PwC apologised this morning.
Cath Burnet, head of audit at KPMG UK, said: “We are committed to resolving, and learning from, our past cases and regret that elements of our work fell short of required standards in this instance.”
“This development marks another step forward in dealing with these matters, and we continue to invest significantly in audit quality, in our technology and training, to drive further improvements.”
A spokesperson for PWC said: “Our work was not of the required standard on this occasion and for this we apologise.”
“We are focused on ensuring the consistent delivery of high quality audits and, in the years since this work took place, the significant and continuous investment we have made in strengthening audit quality has been borne out through improved inspections results.”