KPMG fined £3m for 'serious' Conviviality audit failings
KPMG was fined £3m for deficiencies as auditor of the collapsed drinks wholesaler Conviviality. This is second penalty to hit the Big Four firm this week, as the accountancy watchdog took the firm to task for serious audit failings and misleading inspectors.
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So how long does the queue (of complainants and adverse findings) have to get before the brain in the beast that is KPMG notices the pin being stuck in it's tail?
[The same of course can be said of many of the other big beasts].
It's been said (countless times) before, but nothing will change in practice (even with legislative changes and tinkering with the review bodies) until the individual partners are made directly liable - certainly in financial terms, but preferably also with criminal repercussions.
Yes; to them this is merely an relatively minor inconvenient cost of doing business that is in any event almost inevitably borne by their clients in increased fees due to their oligopoly.
Who pays the fines levied on the individuals? The company, the individual, the individual's PI insurers, someone else?
If those fines are large enough, and the company/insurer/other doesn't indemnify against them, then surely they will decline to accept the position of lead-auditor until the company fixes (and follows) its own procedures.
What am I missing?
Given that there are only 4 then brand damage is almost non-existent
It could even be said that bad auditing is a desirable trait for certain directors
There is very rarely context in these articles - Conviviality was a £1.6 billion turnover group, a £5.7m income recognition issue doesn't seem as serious when it's around 0.36% of turnover.
Regardless, this didn't age well https://www.rkaccountancy.co.uk/download/nicola-quayle.pdf
... Conviviality was a £1.6 billion turnover group, a £5.7m income recognition issue doesn't seem as serious when it's around 0.36% of turnover.
..until you read further down the income statement that profit before tax was £22.5m (2017)
I am not making reference to materiality, testing, truth and fairness or the error itself.
I am talking about the author of the report reporting a large figure without context which would lead the average reader to be shocked- if it was a £20m turnover company and the article mentioned a £70k income recognition error, would it raise an eyebrow? Doubt it
She talks about a "great" support network in the work place but I wonder where it went. Suspect her fellow partners were happy to let her carry the can all the while knowing the whole UK audit system is riddled with systemic failures. Not the first and by nowhere near the last company to go to the wall with a very recent "clean" audit report. Not worth the paper they're written on.