UK watchdog fines former KPMG accountant for misconduct

By Huw Jones

LONDON, Jan 18 (Reuters) - Britain's accounting watchdog
said on Tuesday that KPMG and one of its former employees have
admitted misconduct during the regulator's spot checks on an
audit of software company Regenersis in 2015.

The Financial Reporting Council (FRC) said Stuart Smith has
admitted that he misled inspectors from the watchdog, and that
his conduct was contrary to his ICAEW professional accounting
body's code of ethics.

"KPMG has admitted that Mr Smith’s conduct amounted to
misconduct, and that the firm is liable to be sanctioned in this
respect," the FRC said in a statement.

The watchdog fined Smith 150,000 pounds ($203,745) and
banned him from practising as an accountant for three years.

The FRC said sanctions on KPMG will be determined at the
conclusion of an on-going tribunal hearing https://www.reuters.com/article/kpmg-regulator-idTRNIL1N2TR23A
on checks on audits of Regenersis and builder Carillion
.

Five other former KPMG employees are contesting FRC
accusations of forging missing documents requested by the
watchdog's inspectors during the inspections.

Smith, who was also due to contest the allegations at the
hearing, decided to settle just before proceedings began last
week.

"KPMG agrees that it is liable for the costs of, and
incidental to, the investigation, enforcement proceedings and
settlement in respect of KPMG and Mr Smith," the watchdog said.

KPMG had already admitted nL8N2TQ517 last week to misconduct
in how the FRC was dealt with during spot checks of audits of
Regenersis and Carillion, saying it had self-reported to the FRC
after an internal investigation.

Jon Holt, CEO of KPMG UK, said last week he was very sorry
for the misconduct and was determined to ensure it will never be
repeated.

($1 = 0.7362 pounds)
(Reporting by Huw Jones; Editing by Emelia Sithole-Matarise)

Carillion Plc