News September 2018 Hearing regarding KPMG and members

Hearing regarding KPMG and members

19 September 2018
A hearing of the Disciplinary Tribunal of the Financial Reporting Council ("FRC") will commence on Tuesday 16 October 2018 at 10.00 am to consider a Formal Complaint against (1) Douglas Morgan, a former finance director of Equity Syndicate Management Limited ("ESML") and a member of CIMA, (2) KPMG, a member firm of the ICAEW, (3) Mark Taylor, a partner of  KPMG and a member of the ICAEW and Anthony Hulse, a former partner of KPMG  and a member of the ICAEW.

The hearing venue is The International Dispute Resolution Centre Limited, 70 Fleet Street, London EC4Y 1EU.

The Formal Complaint concerns:

1.         Mr Morgan's role in relation to ESML's claims reserving process in the financial reporting years ending 31 December 2007, 2008 and 2009 and the provisions for outstanding claims included in the financial statements for those years of Syndicate 218, a Lloyds Syndicate;

2.         The conduct of KPMG and Mr Taylor (for the financial reporting years ending 31 December 2008 and 2009) and Mr Hulse (for the financial reporting year ending 31 December 2009) in relation to the audit of the financial statements of Syndicate 218 for those years.

The hearing relates to the investigation notified in AADB Notice PN 45 of 2012 and the delivery of a Formal Complaint in relation to Mr Morgan, KPMG, Mr Taylor, and Mr Hulse.

Notes to editors:
  1. The FRC’s mission is to promote transparency and integrity in business.  The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
  2. 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 under the Accountancy Scheme are:
  • Decision to investigate
  • Investigation
  • Decision whether to bring enforcement 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
Under the Accountancy Scheme 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.

The criteria are specified in paragraph 5(1) of the Accountancy Scheme. A Member or Member Firm shall be liable to investigation under this Scheme only where, in the opinion of the Conduct Committee the matter raises or appears to raise important issues affecting the public interest in the United Kingdom and there are reasonable grounds to suspect that there may have been Misconduct or it appears that the Member or Member Firm has failed to comply with any of his or its obligations under paragraphs 14(1) or 14(2) of the Scheme.
Investigations are conducted by Executive Counsel and the Enforcement division.
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