KPMG under investigation over Rolls-Royce audit
The Financial Reporting Council (FRC) has started an investigation under the Audit Enforcement Procedure into KPMG Audit involving its work with Rolls-Royce.
The FRC’s investigations are centred around the audit of the financial statements of Rolls-Royce Group for the year ended 31 December 2010 and of Rolls-Royce Holdings plc for the years ended 31 December 2011 to 31 December 2013.
In order for a matter to be referred for investigation by the FRC’s Executive Counsel under the Audit Enforcement Procedure, the FRC’s Conduct Committee is required to decide whether there is good reason to investigate an Allegation in relation to a Statutory Auditor and/or a Statutory Audit Firm.
KPMG provided the following statement: “It is important that regulators acting in the public interest should review high profile issues. We will co-operate fully with the FRC’s investigation, which follows the SFO’s investigations into Rolls-Royce. We are confident in the quality of all the audit work we have completed for Rolls-Royce, including the 2010-2013 period the FRC is considering.”
The decision to investigate follows an SFO announcement on 17 January of a Deferred Prosecution Agreement (DPA) between the SFO and Rolls-Royce PLC which relates to offences including conspiracy to corrupt and a failure to prevent bribery.
