KPMG UK has been fined £3.2m by the Financial Reporting Council (FRC) over misconduct in its audit of insurance technology firm Quindell.
The FRC also fined the audit engagement partner at KPMG, Partner William Smith, with a £84,000 fine.
The misconduct relates to two audit areas, according to the FRC, “and included failure to obtain reasonable assurance that the financial statements as a whole were free from material misstatement, failure to obtain sufficient appropriate audit evidence and failure to exercise sufficient professional scepticism”.
In addition the FRC said the two audit areas related to revenue recognition for legal services and series of transactions relating to the sale and purchase of software licenses, related services and investments.
The investigation focused on the Quindell financial statement for the year end 31 December 2013.
The original fine was £4.5m but was reduced to £3.15m as part of the settlement.
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