The Financial Reporting Council (FRC) has imposed sanctions on KPMG and audit engagement partner Nick Plumb for audit failures related to serious breaches of the Ethical Standard 2019 during the statutory audit of the FY21 financial statements of Carr’s Group plc, a listed agribusiness and engineering company.

Jamie Symington, FRC deputy executive counsel, said: ‘The breaches involve the failure to identify bright-line prohibitions designed to secure the independence of the statutory auditor. The Respondents’ failings in this regard were of a basic and fundamental nature.’

Plumb and KPMG breached the FRC’s 2019 Ethical Standard and international audit standards by failing to ensure compliance with independence requirements related to the use of a component auditor, Firm X, which was not a KPMG network firm and did not conform with basic rules on ethical behaviour.