Jobaaj Stories
KPMG, a Big 4 accounting firm, was fined £1,25 million ($ 1.56 million) by the Financial Reporting Council (FRC). It happened for the errors in its work on Luceco Plc's records in 2016.
Stuart Smith, an ex-KMPG employee who worked as an engagement partner on the Luceco audit, was also fined £50,000, as reported by FRC on Thursday.
After admitting failure, KPMG's penalty was cut to £875,000, while Smith's got reduced to £35,000.
Luceco- designs, supplies and manufactures high-quality, energy-efficient LED lighting products. They provide a diverse selection of solutions for both business and residential applications.
Luceco was the parent business of a set of enterprises producing lighting goods and wire accessories during the audit failures, including a production and manufacturing company in China and two distribution companies in the United Kingdom.
According to FRC, the audit issues magnified as KPMG and Smith were aware of failings in past years. It involved the accuracy of the cost of inventory, one of the eight breaches they confessed.
In an emailed statement, UK KPMG audit head Cath Burnet stated they are dedicated to dealing with and learning from their prior cases. They regret that portions of their 2016 audit of Luceco lacked the required criteria. He also stated that they would continue to spend heavily on training, controls, and technology to increase their auditing practice's quality and robustness.
Regulators have chastised the world's top auditors for some of the most high-profile financial crises.
Stay tuned to see who might be next.
-Kritika Singhal
Also, Read KPMG sued over SVB'S faulty report
