Accounting firm KPMG faces two probes from the industry regulator, one in relation to its audit of car dealer Pendragon and another focusing on a partner’s holding of shares in a client company.
The Financial Reporting Council (FRC) said it was looking at whether KPMG was independent when it audited Pendragon’s financial statements for 2010 and 2011, but declined to give more information.
The firm also declined to provide details but said: “We take our professional responsibilities very seriously… we remain of the view that our independence as auditor for these years was maintained.”
KPMG, one of the “big four” that dominate the audit industry, acknowledged a breach of rules on the part of a partner in relation to a shareholding in an unspecified client, but said it was a mistake, adding: “On becoming aware of the matter, we took action in relation to the partner concerned and initiated a review of procedures to ensure that lessons are learnt and applied.”
Pendragon, which appointed former KPMG partner Mel Egglenton as a non-executive director in December 2010, declined to comment. The firm operates under the Evans Halshaw and Stratstone brands.