Accountant KPMG fined £875,000 for bungled 2016 Luceco audit

KPMG has been fined for bungling an audit.

The accountant must pay £875,000 for work it did for lighting manufacturer Luceco for 2016.

‘The breaches included failures in the design and performance of audit procedures, failures to adequately review and critically assess the audit evidence obtained, failure to document the audit work and failures by the respondents to apply professional scepticism,’ said the Financial Reporting Council, the industry watchdog.

Breaches were considered more serious because KPMG and its auditor for Luceco, Stuart Smith, knew of inventory cost errors in the previous year. 

Smith, who is no longer at KPMG, was fined £50,000.

Last year KPMG was fined £14.4million for deliberately misleading the regulator over its audits of collapsed outsourcer Carillion and software company Regenersis. 

Smith also admitted misconduct during a spot check into another audit and was fined £150,000 and banned from practicising as an accountant for three years.