News
Raymond Doherty 4 May 2017 10:03am

KPMG’s Rolls-Royce audit under investigation

The Financial Reporting Council (FRC) has launched a probe into Big Four firm KPMG’s audit work for Rolls-Royce

Earlier this year Rolls-Royce agreed to pay £671m in fines after it admitted bribery and corruption charges to authorities in the UK and US.

KPMG has audited the British engineering giant since 1990.

The FRC’s investigation relates to the audit financial statements of Rolls-Royce Group plc for the year ended 31 December 2010 and of Rolls-Royce Holdings plc for the years ended 31 December 2011 to 31 December 2013.

A spokesperson for KPMG said, “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.”

In January the Serious Fraud Office (SFO), following its largest ever investigation, found that Rolls-Royce had paid bribes and used middlemen to secure contracts in several countries, including India and Thailand, over a period of more than 20 years.

The Big Four firm lost the lucrative audit contract to rival PwC in December last year. The appointment remains subject to approval by shareholders at the annual general meeting in 2018.

In September 2016 ICAEW member and chief financial officer of the Daily Mail & General Trust Stephen Daintith was made CFO at Rolls-Royce. His appointment was part of a shake-up at the firm following five profit warnings in two years and a 20% cut in senior management.

Topics