KPMG facing FRC investigation over Entain audit
By Josh White
Date: Monday 20 Jan 2025
(Sharecast News) - The Financial Reporting Council (FRC) launched an investigation into KPMG on Monday, over its audit of Entain's 2022 financial statements.
It followed the FTSE 100 gambling giant's £615m fine in 2023, linked to historical bribery allegations at its former Turkish subsidiary.
Entain, which owns brands including Ladbrokes, Coral and Bwin, was investigated by HMRC over alleged misconduct between 2011 and 2017.
The case resulted in a deferred prosecution agreement (DPA) that ended the corporate investigation, although individual suspects were invited to enter plea discussions with the Crown Prosecution Service last October.
It was reported on Monday that the FRC's conduct committee decided to initiate its investigation in November, with the enforcement division leading the process under the Audit Enforcement Procedure.
Specific details of the audit work under scrutiny were not disclosed, while KPMG reportedly said that it would cooperate fully with the regulator to resolve the matter swiftly.
This latest inquiry represented another challenge for KPMG, which had faced a series of reputational setbacks in recent years.
It has been working to improve its audit quality following high-profile failures, including its work on the collapsed outsourcing firm Carillion.
In response to regulatory criticism, KPMG's UK leadership had recently implemented measures such as the creation of a dedicated team to oversee banking audits.
Entain's financial reporting had meanwhile been under heightened scrutiny since the bribery scandal, with the company also facing civil legal action.
A group of institutional investors, represented by law firm Fox Williams, filed proceedings in August after Entain's share value declined.
At 0907 GMT, shares in Entain were down 1.25% at 661.2p.
Reporting by Josh White for Sharecast.com.
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