|KPMG fined £14.4m for misleading regulators over Carillion audit|
A tribunal ruled on Thursday that five KPMG auditors were guilty of misconduct after forging documents in an effort to mislead regulators over botched audits at the collapsed outsourcer Carillion. A sixth auditor, Stuart Smith, settled with the accounting regulator before the tribunal began in January. He accepted a £150,000 fine and a three-year ban as a qualified accountant. Peter Meehan, the partner responsible for auditing Carillion; senior managers Alistair Wright, Richard Kitchen and Adam Bennett; and junior auditor Pratik Paw - were found to have created false spreadsheets and records of meetings in response to questions from quality inspectors about work on Carillion and Regenersis, another outsourcer, between 2015 and 2017. Mark Ellison QC, representing the Financial Reporting Council, said the tribunal found that the four senior KPMG auditors “acted deliberately and dishonestly in the creation of false documents and the making of false representations” to the watchdog. Mr Paw, the junior auditor, acted without integrity but not dishonestly, the tribunal found. Individual penalties, which could run to hundreds of thousands of pounds, will be formally decided in the coming months. The FRC recommended partner Peter Meehan be banned from the profession for 15 years and face a fine of at least £400,000. KPMG UK itself was fined £20m reduced to £14.4m to reflect the firm’s cooperation and willingness to admit guilt. The penalty marks the biggest in KPMG’s history and the second largest levied on any accountant. The firm will also face a “severe reprimand” over the “extremely serious” misconduct. Commenting on the settlement with the FRC, KPMG’s chief executive, Jon Holt, said KPMG was “deeply sorry that such serious misconduct occurred in our firm. It was unjustifiable and wrong. It was a violation of our processes and a betrayal of our values. The FRC is running separate investigations into possible failings by KPMG in the Carillion audits.