Watchdog fines ex-KPMG partner over botched Eddie Stobart audit

A hapless accountant branded ‘Britain’s worst auditor’ has been hit with yet another fine following a probe into the books of haulage group Eddie Stobart.

Nicola Quayle, who led the Manchester office of ‘Big Four’ audit firm KPMG for two years until December 2019, has been ordered to pay £45,500 by the Financial Reporting Council (FRC). 

This was discounted from £70,000 as a result of ‘admissions and early disposal’.

The regulator highlighted her seniority at the time of the audit and ‘past disciplinary record’ as aggravating factors. 

KPMG was issued with a penalty of £877,500, discounted from £1.35million, after it admitted ‘serious failings’ in its audit of the 2017 accounts of Eddie Stobart.

Quayle, 53, stopped performing audits in 2020 and no longer holds a licence to practise.

The penalty adds to £155,000 of other fines doled out against her by the FRC, including a £110,000 penalty over the audit of Conviviality, the owner of off-licence Wine Rack and discount chain Bargain Booze, which fell into administration in 2018.

She was also hit with a fine of £45,000 in 2020 from the watchdog in relation to an unnamed company’s audit. 

On top of that, she was reprimanded and ordered to undertake training.

The fines were discounted to £80,850 and £29,250 respectively for prompt payment. 

The FRC also hit rival accounting giant PwC with a fine of nearly £2million, discounted from £3.5million, over its audit of Eddie Stobart’s accounts for the 2018 financial year.

It again highlighted ‘numerous, serious and pervasive failings’ in relation to PwC’s audit work. 

Philip Storer, the partner who led the audit, was also fined £51,187, discounted from £90,000. Both firms apologised for their failings following the FRC penalties.

‘We are committed to resolving, and learning from, past cases and regret that elements of our work fell short,’ said Cath Burnet, head of audit at KPMG UK.

PwC said: ‘Our work was not of the required standard and for this, we apologise.’ Following its 2017 audit of Eddie Stobart, relations broke down between KPMG and the firm and it was replaced by PwC the following year.

The haulier, whose trucks are a familiar sight on motorways, nearly collapsed in 2019 after it emerged profits were overstated by £2million the previous year. 

Shares were suspended in 2019 for six months after a profit warning and chief executive Alex Laffey quit.