Disciplinary Tribunal Hearing of the Formal Complaint against KPMG and others
16 December 2021
Disciplinary Tribunal Hearing of the Formal Complaint against KPMG and others regarding allegedly false and/or misleading information provided to the FRC in Carillion and Regenersis audit quality inspections
The hearing of the Formal Complaint of the Executive Counsel to the Financial Reporting Council (“FRC”) under the Accountancy Scheme against KPMG LLP, a former KPMG partner, and certain current and former KPMG employees will begin on 10 January 2022.
The Formal Complaint alleges Misconduct (as defined at paragraph 2(1) of the Accountancy Scheme) against KPMG and several individual Respondents regarding the provision of allegedly false and misleading information and/or documents to the FRC in connection with the FRC’s Audit Quality Reviews of two audits carried out by KPMG: the audit of the financial statements of Carillion plc for the period ended 31 December 2016 and the audit of the financial statements of Regenersis plc for the period ended 30 June 2014.
KPMG is a member firm of the ICAEW and the individual respondents were all members of the ICAEW.
The allegations in the Formal Complaint are made against each of the individuals only in respect of their own conduct and do not suggest that any individual was responsible for the Misconduct of any of the other individuals subject to the Formal Complaint.
The Formal Complaint does not allege Misconduct in the performance of the relevant audits, nor does it allege that in either case the financial statements had not been properly prepared. The audit, and preparation, of the 2016 Carillion financial statements are the subject of separate investigations, as announced on 29 January 2018
and 19 March 2018
The FRC’s investigation was opened in November 2018 after KPMG had self-reported certain matters relating to the review of the 2016 Carillion audit. The scope of the investigation was expanded in July 2019 to include the review of the 2014 Regenersis audit after KPMG had self-reported certain matters relating to that review. The Formal Complaint was issued on 15 March 2021.
An independent Disciplinary Tribunal will hear the Formal Complaint and determine whether or not the Respondents committed Misconduct.
The hearing will take place at the International Dispute Resolution Centre at 1 Paternoster Avenue, London EC4M 7BQ, or
depending on Government regulations and guidance in respect of Covid-19 in force at the time of the hearing, may take place virtually.
The hearing will be open to the public. If the hearing takes place in person, limitations of space may lead to restrictions on numbers attending in person.
Members of the public may be given remote access to the hearing on application by email to Jessie Liu of the International Dispute Resolution Centre at email@example.com
. Upon application for the link for virtual remote access, applicants will be required to provide a written undertaking (1) not to make any video or audio copy of any part of the proceedings and (2) not to copy or to pass to any other person the internet link to the proceedings.
Update regarding Tribunal proceedings (05 January 2022)
Regarding the forthcoming hearing, the Tribunal has this week reviewed the situation regarding the hearing and after receiving the submissions of the parties. The Chair this morning decided in view of the ongoing COVID position it is appropriate to hear the first three days of the hearing (i.e. 10, 11 and 12 January), which will be opening submissions only, virtually. Then on Thursday 13th, when oral evidence begins the Tribunal will move to an in-person hearing for the remainder of the hearing. Of course that plan could be subject to change in the event of further developments.
Update regarding Tribunal proceedings (07 January 2022)
Opening submissions will be dealt with in the first two days and the hearing will be in person from Wednesday 12 January.
Update regarding Tribunal proceedings (10 January 2022)
Usual commencement time each day will be 10am.
Update regarding Tribunal proceedings (11 January 2022)
The Tribunal has determined that proceedings for the week of 10 January 2022 will be virtual for the whole of the week. People wishing to observe the hearing from next week should monitor this page for durther developments.