KPMG Fined

Article published on 3rd July 2008

KPMG, one of the UK's leading providers of professional services including audit, tax, financial and risk advice, has been fined just under £500,000 and ordered to pay legal costs amounting to of £1.15m for failing in its duty as the auditor of Independent Insurance about 10 years ago.

A report published yesterday by the accountancy industry's Joint Disciplinary Scheme, KPMG and Mr Sayers, the KPMG partner heading up the Independent job, are described as having fallen "seriously below the appropriate standard". Mr. Sayers was also personally fined £5,000.

KPMG has accepted the fines laid against it, but offered an explanation that important information had been withheld by Independent's management back when they had been working together.

A spokesman for KPMG has said: "KPMG regrets that there were shortcomings in certain aspects of its audit of Independent and we accept that we could have done better."

"However, it must be noted that the frauds which led to the collapse of Independent Insurance were perpetrated by a number of Independent's senior directors who have been sentenced to substantial terms of imprisonment."

The company went on to add that: "The complaints on which the settlement is based relate to an audit engagement which took place more than seven years ago. Any lessons that were to be learned... were taken on board very soon after its collapse."

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