UK Financial Reporting Council (FRC) Fines KPMG $936,000 (After Discount) & KPMG Audit Engagement Partner Nick Plumb $52,000 (After Discount) for Breaching Ethical Standard & International Standards on Audit of Carr’s Group, KPMG & Nick Plumb Should Not Had Used Work of External Auditor as the 1) Firm Had Held Role for More than 5 Years & 2) Firm Provided Tax & Accounting Services to Carr’s Billington Agriculture (Operations)
14th June | Hong Kong
The UK Financial Reporting Council (FRC) has fined KPMG $936,000 (After Discount) & KPMG Audit Engagement Partner Nick Plumb $52,000 (After Discount) for breaching Ethical Standard & International Standards on audit of Carr’s Group. KPMG & Nick Plumb should not had used work of external auditor as the 1) Firm had held role for more than 5 years & 2) Firm provided tax & accounting services to Carr’s Billington Agriculture (Operations). UK FRC (12/6/25): “Executive Counsel to the Financial Reporting Council (FRC) has issued a Final Settlement Decision Notice (FSDN) under the Audit Enforcement Procedure against KPMG LLP (KPMG) and Nick Plumb (audit engagement partner) and imposed Sanctions as a result of the investigation into the Statutory Audit of the financial statements of Carr’s Group plc (Carr’s) for the financial year ended 28 August 2021 (FY21). Mr Plumb and KPMG breached the FRC’s 2019 Ethical Standard (the Ethical Standard) and International Standards on Auditing (ISAs) by failing to ensure compliance with applicable independence requirements. The independence issue arose because the Statutory Audit of Carr’s relied on the work of another firm (a component auditor outside the KPMG network, Firm X) who undertook the Statutory Audit of an associate of Carr’s, in circumstances where the audit engagement partner at Firm X had held the role for longer than five years, and Firm X had provided certain non-audit services to the associate entity. The FSDN does not call into question the quality of the substantive audit work conducted either by KPMG or Firm X. The breaches were not dishonest, intentional, or reckless. KPMG and Mr Plumb provided an exceptional level of cooperation during the investigation, including by self-reporting breaches of Relevant Requirements and volunteering relevant additional information. This conduct attracted a 15% discount in addition to the discount for admissions and early disposal … … The following sanctions were imposed: KPMG: A financial Sanction of £1.25m, discounted for admissions, early disposal and exceptional cooperation to £690,625, and non-financial Sanctions comprising: 1) A published statement in the form of a severe reprimand; 2) A declaration that the audit report signed on behalf of KPMG did not satisfy the Relevant Requirements; and 3) A requirement that KPMG review a representative sample of Statutory Audits involving component auditors outside KPMG’s network and report to its FRC supervisor on whether compliance with the independence requirements in the Ethical Standard has been achieved. Nick Plumb: A financial Sanction of £70,000, discounted for admissions, early disposal and exceptional cooperation to £38,675, and non-financial Sanctions comprising: 1) A published statement in the form of a severe reprimand; and 2) A declaration that the audit report signed by Mr Plumb did not satisfy the Relevant Requirements. 3) KPMG has also paid the costs of Executive Counsel’s investigation … … Carr’s is the parent company of a corporate group operating in the agriculture and engineering sectors. In FY21 it was listed on the main market of the London Stock Exchange and was a Public Interest Entity (PIE). The FY21 financial statements of Carr’s were prepared as group financial statements and incorporated the financial results of subsidiaries, joint ventures and associates of Carr’s. In FY21, Carr’s Billington Agriculture (Operations) Limited (CBAO) was one such associate. The financial statements of CBAO were audited by a component auditor outside the KPMG network, Firm X. For the purposes of the Statutory Audit of Carr’s, KPMG and Mr Plumb relied on the work of Firm X. KPMG and Mr Plumb should not have done so for two reasons. First, because Firm X’s audit engagement partner had held that role for more than five years. Secondly, because Firm X provided to CBAO certain tax and accountancy services. KPMG and Mr Plumb should not have signed the Carr’s audit report while placing reliance on the work of Firm X**. As explained in the FSDN, the relevant paragraphs of the FRC Ethical Standard are: i) 3.10 (Key Audit Partner participation); 5.71 (tax services); and 5.120(a) (accounting services).” View: Read the Final Settlement Decision Notice.
“ UK Financial Reporting Council (FRC) Fines KPMG $936,000 (After Discount) & KPMG Audit Engagement Partner Nick Plumb $52,000 (After Discount) for Breaching Ethical Standard & International Standards on Audit of Carr’s Group, KPMG & Nick Plumb Should Not Had Used Work of External Auditor as the 1) Firm Had Held Role for More than 5 Years & 2) Firm Provided Tax & Accounting Services to Carr’s Billington Agriculture (Operations) “
UK Financial Reporting Council (FRC) Fines KPMG $936,000 (After Discount) & KPMG Audit Engagement Partner Nick Plumb $52,000 (After Discount) for Breaching Ethical Standard & International Standards on Audit of Carr’s Group, KPMG & Nick Plumb Should Not Had Used Work of External Auditor as the 1) Firm Had Held Role for More than 5 Years & 2) Firm Provided Tax & Accounting Services to Carr’s Billington Agriculture (Operations)
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