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April 23, 2018

Financial Reporting Council considers KPMG investigation

The Financial Reporting Council (FRC) is looking into the possibility of an investigation of KPMG over the firm’s work with Conviviality, a UK wine supplier and retailer which went into administration earlier this month.

Conviviality issued two profit warnings in March after a mathematical mistake was found in its accounts and a £30m ($41.88m) tax bill was discovered, due to be paid to Her Majesty’s Revenue and Customs by the end of March.

The regulator said in a statement: “The FRC is looking closely at the reported accounting issues at Conviviality. If the relevant threshold tests are met in relation to accountants at the company and/or its auditors a formal investigation may be opened.”

KPMG, which was Conviviality’s auditor from 2015, is currently under investigation by the FRC due to its external audit work for Carillion which went into liquidation at the start of the year.

PwC was appointed as the company’s administrators and managed to find a buyer for Conviviality’s retail business, which was sold to Bestway, a UK conglomerate, for £7.25m.

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