KPMG fined over Revolution audit errors

The financial services company was severely reprimanded by the Financial Reporting Council (FRC) for breaching standards in its audits of Revolution for the 2015/2016 financial years.

Mistakes by auditors working on the bar group’s accounts meant the audits 'failed to achieve their principle objective of providing reasonable assurance that the financial statements were free from material misstatement', the watchdog said.

Multiple misstatements later had to be corrected.

Some of the errors made by KPMG related to their treatment of supplier rebates and listing fees, share-based payments and deferred taxation.

Errors relating to supplier rebates and listing fees were made despite the regulator warning in 2014 and 2015 that such complex arrangements were particularly risky and would be a focus of its annual spot check of audit quality.

The FRC found that while the problems were 'serious breaches', they 'were not intentional, dishonest, deliberate or reckless'. 

It told KPMG to analyse the 'underlying causes' of its role in breaching standards, identify and implement any necessary remedial measures, and report back.