Cpcmcredit Blog

KPMG have been fined a further £21M on top of last years £14m for failures during their “auditing” of Carillion. Large sums certainly but are they sufficient to deter future malpractice?

This is not a particular dig at one firm because virtually all the large accountancy firms (with I believe one notable exception) have been guilty. Clearly the controls, such as they were, were not working. It is also fair to say that overall, this firm is probably not the worst culprit and those with a keen eye on such scandals as Patisserie Valerie, will note that one name comes up all too frequently

Auditing is a strange business. Take this

KPMG’s UK chief executive said the FRC’s findings were “damning”. 

“I am very sorry that these failings happened in our firm,” said Jon Holt. “It is clear to me that our audit work on Carillion was very bad, over an extended period. 

“In many areas, some of our former partners and employees simply didn’t do their job properly.”

Only in auditing can you profit from not “doing your job properly”

As for the fines, no they are not enough.

The sanction should be a suspension or even loss of licence. Just as professionals in other disciplines are “struck off” (and often for seemingly relatively trivial matters) then the same should apply to firms that “do not do their jobs properly”