Wire flash
FinanceUK FRC launches two investigations into KPMG over Wood Group audit
Editorial responsibility
- No named human review is recorded for this page.
- Source reporting is collected, normalized, translated or condensed automatically when needed.
- Automatically published source-backed update
The UK Financial Reporting Council (FRC) has launched two separate investigations into Big Four firm KPMG and two accountants concerning the financial reporting and statutory audit of John Wood Group, an engineering and consulting firm formerly listed in London. The probe covers the preparation and communication of financial information in Wood Group's 'project business unit' for 2022, 2023, and 2024, as well as KPMG's audit of the group's 2023 consolidated financial statements. Wood Group was fined nearly £13 million by the Financial Conduct Authority (FCA) in March for misleading financial results and failing to maintain proper market controls. The company's shares plunged over 70% in November 2024 after the financial misreporting was revealed. Wood Group was acquired by Dubai-based Sidara in March and delisted from the London Stock Exchange less than a year after its listing. The FRC has also recently opened other investigations, including into alleged financial misreporting at Battersea Power Station and the collapsed lender Market Financial Solutions.
Source report
Image credit: Vuk Valcic/SOPA Images/LightRocket via Getty Images
The UK's audit watchdog has launched an investigation into Big Four accounting firm KPMG and two of its accountants concerning the accounts of engineering and consulting firm John Wood Group.
The Financial Reporting Council (FRC) announced on Thursday that it had opened two separate regulatory investigations into the financial reporting and statutory audit work of the former London-listed group.
John Wood Group, an engineering and consulting business headquartered in Scotland, was taken private in March this year after being acquired by Dubai-based Sidara, less than a year after its stock market listing. The company subsequently delisted from the London Stock Exchange.
In March, the firm was fined nearly £13 million by the Financial Conduct Authority (FCA) for issuing misleading financial results and failing to maintain adequate market controls. The City regulator stated that the group's accounting judgments had been improperly influenced in an effort to sustain previously published financial performance, due to underperformance in certain projects.
The revelation of Wood Group's inaccurate financial reporting emerged in November 2024, triggering a share price collapse of more than 70%, with shares falling to around 28 pence.
KPMG Under Scrutiny
KPMG and its audit firm now face an FRC investigation, following approval by the Conduct Committee last month.
The investigation will focus on how financial information was prepared and communicated with auditors for Wood Group's "Projects business unit" during the financial years 2022, 2023, and 2024.
The FRC is also investigating KPMG's statutory audit of the group's consolidated financial statements for the 2023 financial year.
Over the past month, the FRC has launched multiple investigations, including a review of alleged financial misreporting by the former CEO of Battersea Power Station and an examination of the accounts of collapsed mortgage lender Market Financial Solutions.
Source
City AMWestern
Part of this Story
UK Watchdog Investigates KPMG Over Wood Group Audit