KPMG has been hit with a fine of £3m for misconduct in relation to audits of fashion brand Ted Baker.
UK’s accounting regulator, Financial Reporting Council (FRC), said today that the auditor, which admitted wrongdoing, would also get a “severe reprimand”.
“Ethical standards are critical in supporting the confidence that third party users can reasonably have in financial statements in circumstances where, of necessity, they only have incomplete information to judge whether the auditor is in fact objective,” said FRC deputy chief Claudia Mortimore.
“Where those standards are breached such that the auditor’s independence is lost, user confidence is likely to be undermined; the FRC makes clear by these sanctions the seriousness with which such breaches and their consequences are viewed.”
The misconduct arose from KPMG providing expert witness services to Ted Baker in a commercial court claim.