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FRC to investigate KPMG over Rolls-Royce audit

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The UK financial reporting watchdog, the Financial Reporting Council (FRC), launched an investigation into KPMG in connection with the audit of statements for Rolls-Royce Group for the year to December 31, 2010 as well as those of Rolls-Royce Holdings for 2011 to 2013.

The decision to investigate followed the deferred prosecution agreement between Rolls-Royce and the Serious Fraud Office in January, when the engineering group agreed to pay a total of £671m in fines to regulators in the UK, US and Brazil to settle wide-ranging allegations of corruption in Indonesia, Russia, China, Nigeria, Brazil and several other jurisdictions.

KPMG said it would co-operate fully with the FRC’s investigation. “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 FRC is taking an increasingly tougher stance in policing accountancy firms, and earlier this year called on the UK government to furnish it with additional powers to discipline company directors over accounting misconduct.

https://www.ft.com/content/bacca773-1c6f-3714-848a-055d4f286947