KPMG fined £1.25m for Luceco audit by UK watchdog

KPMG LLP was fined £1.25 million ($1.56 million) by the UK audit watchdog over errors it made in its work on Luceco Plc’s books in 2016.

An-ex KMPG employee, Stuart Smith, who was audit engagement partner for the Luceco audit, was also fined £50 000, the Financial Reporting Council said in a statement on Thursday. KPMG’s sanction was discounted to £875 000 after admissions of the failure while Smith’s was reduced to £35,000.

At the time of the audit failures, Luceco was the parent of a group of companies producing lighting products and wiring accessories, including a production and manufacturing company in China and two distribution companies in the UK.

The audit errors were compounded by the fact that KPMG and Smith had been aware of failures in previous years concerning the accuracy of the cost of inventory — one of the eight breaches they admitted, the FRC said.

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