By Huw Jones
LONDON, Sept 1 (Reuters) - KPMG allegedly provided "false
and misleading" information about its audits of collapsed
builder Carillion and data erasure company Regenersis for
regulatory checks, Britain's accounting watchdog said on
Wednesday.
The information was provided in connection with the
Financial Reporting Council's (FRC) routine annual quality
checks of audits by the main accounting firms.
"The formal complaint alleges misconduct against KPMG and
several individuals regarding the provision of allegedly false
and misleading information and/or documents to the FRC by KPMG
in connection with the FRC's inspections of two audits carried
out by KPMG," the watchdog said in a statement.
The complaint is against KPMG itself, a former partner, and
certain current and former employees, the FRC said.
"The formal complaint does not allege misconduct arising
from the performance of the relevant audits, nor does it allege
that in either case the financial statements had not been
properly prepared," it added.
KPMG said it took the matter extremely seriously.
"We discovered the alleged issues in 2018 and 2019, and on
both occasions immediately reported them to the FRC and
suspended the small number of people involved," KPMG said.
A disciplinary tribunal will hear the formal complaint and
determine whether there has been misconduct. The hearing will
start in January 2022.
"The allegations in the formal complaint would, if proven,
represent very serious breaches of our processes and values. We
have cooperated fully with our regulator throughout their
investigation," KPMG added.
Separately, the FRC is investigating KPMG's audit of
Carillion, whose collapse triggered a string of
government-backed reviews to improve standards in a market
dominated by KPMG, EY, Deloitte and PwC, known collectively as
the Big Four.
In its latest annual report on routine quality checks
published in July, the FRC said KPMG's bank audits needed
improvements for an "unacceptable" third year running and the
accounting firm will be closely monitored.
(Reporting by Huw Jones; Editing by Emelia Sithole-Matarise)
Carillion Plc (CLLN)