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KPMG
On 3rd July 2018, the Financial Reporting Council announced an investigation into the role of KPMG in terms of its 2017 financial year audit of Conviviality, a UK drinks supplier, that went into administration in April 2018 relating to non-tax payments. KPMG is also currently under investigation by UK regulators for the quality of audits of:
• Carillion
• Ted Barker
• BNY Mellon
• Coop Bank
• Rolls Royce
• Equity Red Star
In June 2018, the FRC stated that KPMG had been too passive and reactive and that there had been an unacceptable deterioration in the quality of audits carried out by KPMG’s with 50% of the firm’s FTSE 350 audits requiring more than just limited improvements compared to 35% in the previous year.
In June 2018 FRC fined KPMG £3.2 million for its audit work in Quindell, an insurance technology company.
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Deloitte
The Financial Reporting Council has started an investigation of Deloitte’s 2015 and 2016 audits of SIG, a UK insulation and exteriors company. In February 2018, SIG reported that a whistle-blower had reported that financial irregularities were occurring within the business. In 2016 the profits of SIG are being reported as being overstated by £3.7 million and in the first half of 2017 they were reported as being overstated by £2.5 million. Previous years overstatements total £400,000. In May 2018 shareholders rejected the appointment of Deloitte as the company’s auditor.
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PwC
PwC has recently been fined a record £6.5 million over its audit of BHS, a UK departmental store.