News August 2013 Closure of investigation into the conduct of: KPMG Audit plc, Member Firm of the ICAEW

Closure of investigation into the conduct of: KPMG Audit plc, Member Firm of the ICAEW

01 August 2013

 

PN 075
 

The Financial Reporting Council (FRC) announces the closure of the investigation into the conduct of KPMG Audit plc as auditors to British Aerospace/ BAE Systems Group plc and subsidiaries.
 
The Accountancy and Actuarial Discipline Board (AADB) launched its investigation in 2010 into audits and professional services advice provided by KPMG to BAE in the period 1997 to 2007. Subsequent investigations have shown that proper assessment of KPMG’s conduct would require consideration of work undertaken in earlier years. Because there is no realistic prospect that a Tribunal will make an adverse finding in respect of a complaint relating to work done so long ago it has been concluded that it is not in the public interest to extend the investigation to the years preceding 1997.
 
The investigation has therefore been closed in accordance with paragraph 7(14) of the FRC Accountancy Scheme.
 
Notes to editors:
 
  1. The FRC is responsible for promoting high quality corporate governance and reporting to foster investment. We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work.  We represent UK interests in international standard-setting.  We also monitor and take action to promote the quality of corporate reporting and auditing.  We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.
     
  2. In relation to disciplinary matters, the FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issues affecting the public interest. In brief, the stages of the disciplinary process are:
     
  • Decision to investigate
  • Investigation
  • Decision whether to bring disciplinary proceedings against Member Firm or Member and, if so decided, referral to Disciplinary Tribunal
  • Tribunal hearing
  • Determination and imposition of sanction and/or costs orders
     
The FRC can start a disciplinary investigation in one of two ways: (i) the professional bodies can refer cases to the FRC; and (ii) the FRC may decide of its own accord to investigate a matter. The Conduct Committee will consider each case identified or referred to it and decide whether or not the criteria for an investigation are met.
 
Investigations are conducted by Executive Counsel and the Professional Discipline team within the Conduct Division. If disciplinary proceedings are commenced, Executive Counsel delivers a complaint to the Conduct Committee. The Conduct Committee then instructs the Convener to appoint a Disciplinary Tribunal.
 
  1. All Press enquiries should be directed to: Peter Timberlake, Head of Communications, on telephone: 020 7492 2397 / 07768 502332, or email: p.timberlake@frc.org.uk. Or to Sophie Broom, Communications Executive, on telephone: 020 7492 2395 / 07771 808464 or email: s.broom@frc.org.uk.

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