KPMG fined £1.5m over ‘basic failings’ in its audit of advertising firm M&C Saatchi

KPMG has been fined £1.5million over ‘basic failings’ in its audit of advertising firm M&C Saatchi that emerged following an accounting fiasco in 2019.

Adrian Wilcox, a KPMG partner, was also fined £48,750 as a result of an investigation by the Financial Reporting Council (FRC), which regulates the accounting industry. 

KPMG was separately fined a record £21million by the FRC last October for ‘textbook’ failings in scrutinising the accounts of construction giant Carillion before it collapsed. 

The latest penalty comes after the fiasco five years ago when M&C Saatchi announced the discovery of a £11.6million accounting error for 2018. 

That prompted a subsequent clear-out of board members including co-founder Lord Saatchi. 

KPMG was the auditor responsible for checking the company’s books, with a team led by Wilcox.

KPMG admitted breaching audit requirements including in relation to a type of payment that inflated revenues by £1.2million.

The auditor also failed to ‘complete their enquiries with management’ on another aspect of the accounts.