“Big Four” accountant KPMG is reeling from a string of recent fines and scandals linked to poor quality audits carried out in the past. In December, KPMG ruled itself out of bidding on new government contracts after the Cabinet Office threatened a ban due to historic misconduct.
KPMG was the auditor on Conviviality, the AIM-listed owner of Bargain Booze, before its collapse in 2018. The company — which supplied the likes of JD Wetherspoon, Slug & Lettuce, Hilton Hotels in the UK and even The Ivy — was worth half a billion pounds at its height. It expanded rapidly through a string of acquisitions but collapsed after an accounting error led to a fatal profit warning.
The Financial Reporting Council (FRC) today fined KPMG for poor quality audits of Conviviality in 2017 and 2018. Nicola Quayle, the former KPMG partner who led the work, was personally fined £80,850.
Holt said: “We continue to invest significantly in our business, taking action to address the FRC’s findings and implementing our Audit Quality Transformation Programme, which includes comprehensive new training, controls and technology.” The remarks were subsequently leaked to the press.
Holt was elevated to the top job last year in the wake of another crisis. Predecessor Bill Michael resigned last February after outcry among staff about comments he made during an online meeting. Michael told staff to “stop moaning” and “playing the victim” in relation to the pandemic.