KPMG fined £5m over Co-Op Bank audit by watchdog

The accountancy watchdog has fined KPMG £5m over their audit of the Co-operative Bank in 2009, the firm will now face regular scrutiny.

The Financial Reporting Council (FRC) said on Wednesday after KPMG admitting misconduct the fine has been discounted by £1m to £4m, the company will also pay £500,000 towards costs.

Partner Andrew Walker was fined £125,000 with a discounted settlement of £100,000 and was “severely reprimanded.”

The FRC said KMPG and Walker failed in obtaining the appropriate audit evidence, they failed to exercise sufficient professional scepticism.

They further failed to inform the Co-op Bank over the disclosure of the expected lives of the notes in the financial statement were not adequate.