M&C Saatchi’s accounting problems in the year to 2018, which ultimately led to the departures of founders Lord Saatchi, David Kershaw, Bill Muirhead and Jeremy Sinclair, have led to auditor KPMG being fined £1.5m by the Financial Reporting Council.
KPMG partner Adrian Wilcox has also been fined nearly £50,000. Partners at KPMG earned an average of £746,000 last year, not bad when you seemingly can’t add up.
KPMG has been fined 16 times since 2018 including a record £21m for auditing failures with government contractor Carillion. M&C has at least avoided the fate of Carillion which went bust in January 2018.
Claudia Mortimore, deputy executive counsel at the FRC, says: “KPMG’s audit did not meet the required quality standards in a number of respects amounting to serious audit failings and breaches of audit standards.”
The FRC says KPMG did not apply sufficient professional scepticism over a client payment that increased revenues by £1.2m and failed to properly audit journal entries across a number of subsidiary companies.
M&C has since seen a number of top level management changes. It remains a quoted company in the UK with a market value of £212m.
