UK Auditing Authority Probes KPMG Over Retailer’s Accounting Issues

  • FRC launches investigation into KPMG’s last Conviviality audit
  • Investigation to cover financial statements of Conviviality from 2015-2018
  • Problems began in March due to accounting error and unnoticed £30m tax bill
  • KPMG believes it conducted audit appropriately, will cooperate with investigation

The Financial Reporting Council (FRC) has launched an investigation into the audit of Conviviality by KPMG, covering the period from 2015 to its administration in April 2018. The FRC will examine the preparation and approval of financial statements and other information by an ICAEW member. Problems at Conviviality began in March due to a 20% profit shortfall caused by an accounting error, worsened by a £30m tax bill not accounted for. KPMG stated it conducted the audit appropriately and will cooperate with the investigation. Last month, PwC was fined £10m over BHS audits.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the FRC’s investigation into KPMG’s audit of Conviviality’s financial statements. It includes relevant details about the situation at Conviviality and KPMG’s response to the investigation. The article also provides context by mentioning a related case involving PwC, but it is not excessive or off-topic.
Noise Level: 3
Noise Justification: The article provides relevant information about the FRC’s investigation into KPMG’s audit of Conviviality and includes statements from KPMG. However, it lacks in-depth analysis or new insights, and focuses on repeating some recent events without offering much additional context or actionable knowledge.
Financial Relevance: Yes
Financial Markets Impacted: KPMG and Conviviality
Financial Rating Justification: The article discusses an investigation by the Financial Reporting Council into KPMG’s audit of Conviviality’s financial statements, which could impact the reputation and business of both companies. It also mentions a significant tax bill that affected Conviviality’s finances.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: No extreme event mentioned in the text

Reported publicly: www.retailsector.co.uk