Record £14m fine for KPMG over Carillion and Regenersis audits with partner Peter Meehan banned from ICAEW
The UK’s accounting watchdog has fined KPMG £14.4m and told it to pay £3.95m in costs for providing false and misleading information during its audits of Carillion and Regenersis.
The UK’s Financial Reporting Council (FRC) also fined four of KPMG’s former auditors, banned them from the accounting sector’s professional membership body, and severely reprimanded another junior KPMG employee, for their efforts in misleading the FRC.
The FRC fined former KPMG partner Peter Meehan £250,000 and banned him from the Institute of Chartered Accountants in England and Wales (ICAEW) for 10 years.
Three other former KPMG executives – Alistair Wright, Richard Kitchen, and Adam Bennett – were sums of £45,000, £30,000, and £40,000 respectively.
Wright and Bennett were also both banned from being members of the ICAEW for eight years each while Kitchen was banned for seven years.
Another junior employee, Pratik Paw, who had not qualified as an accountant before he was told to forge documents by his superiors, was severely reprimanded.
The decision not to fine Paw comes after the FRC recommended to a tribunal that the junior accountant be fined £50,000.
Elizabeth Barrett, executive counsel at the FRC, said: “Misconduct that deliberately undermines the FRC’s ability to monitor and inspect the effectiveness of audits is extremely serious because it obstructs the FRC’s ability to protect the public interest.”
“This case underlines the need for all professional accountants, regardless of seniority, to be aware of their individual responsibility to act honestly and with integrity in all areas of their work.”
KPMG UK chief executive Jon Holt said: “I accept the findings and sanctions of the tribunal in full. The behaviour underlying this case was wrong and should never have happened.” We reported it to our regulator as soon as we uncovered it and we have cooperated fully with their investigation.”
“Since then, we have worked hard and with complete transparency to our regulator, to assure ourselves that the behaviour of the individuals concerned does not reflect the wider culture of the firm.”