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Financial watchdog investigates KPMG over Conviviality audit

03 July 2018 by
Financial watchdog investigates KPMG over Conviviality audit

The financial watchdog has begun an investigation into KPMG over its work for former Matthew Clark owner Conviviality.

The Financial Reporting Council (FRC) will look into KPMG's audit of Conviviality for the year to 30 April 2017.

Conviviality fell into administration in April after issuing two profit warnings regarding accounting errors. They included admitting it had failed to spot a £30m tax bill.

Shortly after Conviviality's collapse, Matthew Clark and Bibendum was sold to C&C Group.

Now the FRC has opened a formal investigation under the Audit Enforcement Procedure into KPMG's work.

It said: "The FRC has also commenced an investigation under the Accountancy Scheme into the preparation and approval of Conviviality's financial statements and other financial information by a member of the ICAEW."

A KPMG spokesperson said that the firm would co-operate fully with the investigation.

They said: "As reported by the company, it experienced margin weakness at the start of 2018 and also a significant payment to HMRC which had not been included within its short term cash flow projections, creating a short term funding requirement. Our audit of the company's financial statements for the year ended 30 April 2018 had not yet commenced at the point which administrators were appointed."

Matthew Clark and Bibendum seek to reassure customers following sale >>

Accounting watchdog "looking closely" at Conviviality and auditors >>

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