KPMG fined £0.87m over Luceco audit failures

(Sharecast News) - Accounting giant KPMG has been fined £875,000 by the industry regulator for its audit of lighting manufacturer Luceco, officials said on Thursday.

The fine relates to an audit of Luceco's 2016 accounts, the Financial Reporting Council said (FRC). Former KPMG employee Stuart Smith admitted eight breaches of "relevant requirements" during the audit and was fined £50,000, discounted to £35,000 for admitting his breaches of the rules. KPMG's original fine was £1.25m.

"The breaches included failures in the design and performance of audit procedures, failures to adequately review and critically assess the audit evidence obtained, failure to document the audit work and failures by the respondents to apply professional scepticism," the FRC said.

It added that the breaches were made more serious by the fact that KPMG and Smith were aware of inventory cost errors in the previous year.

Reporting by Frank Prenesti for Sharecast.com