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KPMG UK faces multimillion-pound fine over Rolls-Royce bribery scandal

KPMG UK faces multimillion-pound fine over Rolls-Royce bribery scandal
  • KPMG faces fines of over £4 million ($5 million) for its work on Rolls-Royce Holdings' accounts dating back over a decade.

KPMG, the British-Dutch Audit, Tax, Advisory service provider and one of the world’s ‘big four’ accounting firms, has been reportedly hit with another string of multimillion-pound penalties for failing to oversee the account of the British aerospace company, Rolls-Royce Holdings.

According to sources, the big four auditor might face a £4-£5 million ($5-$6 million) fine as immediately as this week for work that dates back over a decade.

As per a source privy to the matter, the £4.5 million ($5.6 million) was expected to essentially be discounted to reflect the company’s cooperation with the Financial Reporting Council's (FRC) inquiry.

KPMG had been the auditor of the British aircraft engine manufacturer since 1990, but it was fired immediately after a bribery and corruption case against the engineer was settled in 2017, spanning five countries and three decades.

The firm was fined £670 million ($843 million) as a result of the agreements with the Serious Fraud Office (SFO) and the US Department of Justice.

As per reports, the FRC initiated a probe into the accounting firm soon after Rolls Royce’s Deferred Prosecution Agreement (DPA) with the SFO was publicized.

Five years ago, the accounting watchdog stated that the move to investigate follows the SFO's official announcement on 17 January 2017 of a DPA involving Rolls-Royce PLC and the Serious Fraud Office relating to charges such as failure to prevent bribery and conspiracy to corrupt.

This the latest in a string of financial punishments KPMG has faced in recent times, the company has had a tumultuous period marked by changes to management and criticism of its auditing practices, most prominently on the now bankrupt construction firm, Carillion.

Just two weeks ago KPMG faced a £14 million ($18 million) fine after it admitted that it misled regulators during spot checks on audits of Carillion as well as software firm, Regenersis.

Conviviality and Revolution Bars, are among the other audits KPMG has been fined over in recent times.

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Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.