KPMG fined £1.25m for audit breaches in Carr's Group review

From Yahoo Finance: 2025-06-16 11:29:00

Auditing giant KPMG has been fined £1.25m by the FRC for breaching audit independence rules during its 2021 audit of Carr’s Group. The FRC found that KPMG relied on another firm, “Firm X,” for more than five years, compromising objectivity. The lead audit partner’s prolonged tenure exacerbated compliance and independence issues.

The FRC emphasized the importance of maintaining trust and confidence in audit opinions. While the audit quality was not questioned, KPMG and Plumb failed to address breaches adequately in FY21. The breaches involved failing to identify clear prohibitions to ensure the independence of the Statutory Auditor, reflecting basic and fundamental failings.

KPMG’s fine for audit breaches in the Carr’s Group review highlights the significance of maintaining audit independence and compliance. The FRC’s Final Settlement Decision Notice underlines the fundamental importance of upholding professional soundness and objectivity in audit engagements. The breaches, although serious, did not call into question the quality of audit work but raised concerns about independence and compliance.



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