Yesterday, the UK Financial Reporting Council (FRC) launched an investigation into KPMG over its audit work for FTSE 100 gambling group Entain, as reported by the Financial Times.
Entain was fined £615 million in 2023 under a deferred prosecution agreement, which followed a years-long investigation into allegations of bribery at its Turkish unit from 2011 to 2017. While KPMG has served as Entain's auditor since 2018, the FRC will probe its audit of the firm's 2022 accounts in particular. The FRC did not specify which aspects of the audit were being investigated.
In recent years, KPMG has struggled to get out from under a series of scandals in the UK and abroad. In 2022, for instance, the firm was fined £14.4m for having deliberately misled the FRC about its audit work for collapsed firms Carillion and Regenersis. And, in April 2024, the US Public Company Accounting Oversight Board fined KPMG Netherlands $25 million, the regulator's largest-ever penalty, for widespread exam cheating among its employees.
While KPMG has faced the most scrutiny out of its Big Four competitors, it is certainly not alone. In 2023, Starling Insights published "Renal Failure: A Crisis in Audit Culture?," a Deeper Dive report discussing scandals faced by auditors globally and how such trends impact society at large.
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