THE accountancy regulator has fined KPMG and a partner over its audit of advertising agency M&C Saatchi.

Back in 2019, the Big Four firm resigned as the ad giant's auditor amid an accounting scandal which saw the company set aside £6.4m after it had spotted an error in its accounts.

The business had also overstated its profits by £14m over a number of years.

KPMG's chief risk officer John Bennett led the audit of M&C Saatchi from 2013 to 2017, then partner Adrian Wilcox took over in 2018.

KPMG faced scrutiny from the Financial Reporting Council (FRC) as the regulator launched an investigation.

It was revealed that the FRC has issued a final settlement decision notice (FSDN) under the Audit Enforcement Procedure and imposed sanctions against KPMG and Adrian Wilcox.

KPMG has been hit with a financial sanction of £2.2m, which has been discounted for admissions and early disposal to £1.4m.

The firm also has been issued with non-financial sanctions consisting of a published statement in the form of a severe reprimand and declaration that the audit report signed on behalf of KPMG did not satisfy requirements.

Wilcox himself was issued a financial sanction of £75,000, discounted for admissions and early disposal to £48,750.

Cath Burnet, head of audit, KPMG UK, said: "We are committed to dealing with, and learning from, our past cases and regret that aspects of our 2018 audit of M&C Saatchi fell short of required standards."

£1.46M KPMG's sanction discounted from £2.2m for admissions and early disposal

(c) 2024 City A.M., source Newspaper