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12 June 2018
The FRC has fined and reprimanded KPMG and partner William Smith following their admission of misconduct in relation to the audit of Quindell plc.
The independent tribunal panel fined and reprimanded KPMG £4.5m, discounted for settlement to £3.15m. The firm was also ordered to pay £146,000 towards executive counsel’s costs.
Smith was fined £84,000 and reprimanded.
The misconduct related to two audit areas, and included failure to obtain reasonable assurance that the financial statements as a whole were free from material misstatement, failure to obtain sufficient appropriate audit evidence and failure to exercise sufficient professional scepticism.
The audit areas were:
Revenue recognition for legal services.
A series of transactions relating to the sale and purchase of software licenses, relating to services and investments.
Quidnell made prior-year adjustments in both areas the following year, in their financial statements for the year ended 31 December 2014.
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