The Financial Reporting Council (FRC) has issued a Final Decision Notice under the Audit Enforcement Procedure and imposed non-financial sanctions on KPMG in relation to the statutory audits of the financial statements of Foresight 4 VCT plc (“the Company”) for the 2012/2013, 2013/2014 and 2014/2015 financial years
The following sanctions have been imposed:
- A Reprimand; and
- an order that KPMG monitor compliance with revised audit procedures on company capital and distributions, and report on this to the FRC’s Executive Counsel.
KPMG admitted shortcomings in its audits of figures relating to the Company’s distributable reserves. These failings may have led to misstatements relating to distributable reserves in the Company’s financial statements, which were later restated in 2016 and 2018.
Executive Counsel’s determination as to sanctions reflects that:
- KPMG has taken steps to improve its audit procedures on distributions;
- The breaches of Relevant Requirements were not intentional, dishonest, deliberate or reckless;
- There is no suggestion that there were insufficient distributable reserves to cover distributions made by the Company; and
- The misstated figures for the Company’s reserves did not affect the Company’s profits or net asset value.
A link to the Final Decision Notice can be found here.