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B ig Four accountancy firm KPMG has been handed a £ 728, fine and has one of its senior partners banned from some forms of audit work after the watchdog found failings in relation to work done for an unnamed company.

The fine for the audit firm – levied by the Financial Reporting Council – was discounted from £ 756, 02 because it admitted faults, which relate to the “the statutory audit of the financial statements of a company for the 2019 / 29 financial year ”.

The FRC said:

Whilst the Ddecision notice does not question the truth or fairness of the company FY 20200402 financial statements, the breaches of relevant requirements related to the audit of items which were material to the consolidated income statement, albeit the scope of the breaches was relatively limited in nature.

They are concerned the respondents ’failure to apply sufficient professional scepticism, or to obtain and document sufficient appropriate audit evidence, in relation to the statutory audit of the company’s reporting of two distinct categories of complex supplier arrangements; namely “promotional income” and “overrider income”.

Senior partner Nicola Quayle has been fined £ 29, 455 in relation to the case. She will be made to undertake additional training, and has agreed to a two-year ban on undertaking statutory audits of public interest entities. KPMG will also undertake a quality review of three such audits for which Ms Quayle is the statutory auditor.

The watchdog said the seriousness of the breaches had been “aggravated” by KPMG and Ms Quayle’s poor recent regulatory records and her seniority within the firm.

The FRC’s Claudia Mortimore said:

This is a measured and proportionate package of sanctions, which balances on the one hand the limited nature of the breaches, which did not call into question the truth or fairness of the financial statements, with the fact that auditors should have been on alert to pay particular attention to these types of complex supplier arrangements.

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