The Financial Reporting Council (FRC) has announced dates for disciplinary hearings against Big Four firm KPMG and two of its partners over breaches of ethical standards when handling audits for listed companies Pendragon plc and Cable and Wireless Worldwide
The hearings will decide the level of sanctions against KPMG and their partners, following earlier admission of breaches of the standards.
The first hearing is scheduled for 5 December and will focus on possible sanctions following a formal complaint against KPMG Audit PLC, a member firm of the ICAEW and Greg Watts, a member of the ICAEW, regarding breaches of the ethical standards for auditors in relation to KPMG’s audit of the financial statements of Pendragon PLC, a listed audit client of the firm.
The hearing relates to the investigation notified in the FRC notice (PN048) of 9 May 2013. The formal complaint is admitted and the purpose of the hearing is to determine the appropriate sanctions.
However, the FRC stressed that the formal complaint excludes the independence of the audit of Pendragon’s financial statements for the years ended 31 December 2010 and 2011 or any other period.
The second hearing scheduled for 4 December concerns a formal complaint over ethical standards’ breaches against KPMG LLP and James Marsh, a member of the ICAEW. This hearing centres around KPMG’s work as auditors for Cable and Wireless Worldwide plc, a former listed audit client of the firm in 2011-2012.
The hearing relates to the investigation notified in FRC notice (PN047) of 9 May 2013. The Formal Complaint is admitted and the purpose of the hearing is to determine the appropriate sanctions.
The hearings will both take place at The International Dispute Resolution Centre, 70 Fleet Street, London EC4Y 1EU.