Accounting giant KPMG has been fined 3.3 million pounds ($4.16 million) by UK regulators over the company’s audit of Rolls-Royce, which took place more than a decade ago.
The Financial Reporting Council (FRC) had originally imposed a penalty of 4.5 million pounds on KPMG over its audit of the aero engine producer, which was found to have made unlawful payments to third parties in India between 2007 and 2011. Rolls-Royce was itself fined almost 500 million pounds by Britain’s Serious Fraud Office in 2017.
The accounting watchdog decided to reduce the penalty to 3.3 million pounds in light of admissions made by KPMG.
KPMG, known as one of the “big four” accountants globally, will also be required to pay for an external review of its policies in light of the matter. The FRC said it had also issued a 112,500 pound fine to Anthony Sykes, KPMG’s partner in the Rolls-Royce audit.
The fine is the latest in a string of penalties dished out to the firm this year, with KPMG also fined over audits of now-collapsed alcohol retailer Conviviality and hospitality group Revolution Bars in January and March respectively.
The company was also last week referred to an independent tribunal by the FRC over its failings during audits of construction group Carillion and software firm Regenersis.
Jon Holt, KPMG’s UK chief executive, apologized for his company’s failings, and expressed pleasure that what he described as a “historic matter” had been brought to a conclusion.
“In addition to resolving legacy cases, we are also investing significantly in training, controls and technology to improve quality and resilience in our audit practice,” Holt said.