September 21, 2019

KPMG Gets One-Year Auditing Ban in Oman

2018 has been a no-good, rotten year for KPMG. The firm has been embroiled in accounting scandals in the United States and South Africa, was told by the United Kingdom’s accounting regulator that its audit quality sucks, defended an indefensible audit of the now-collapsed Carillion in the U.K., was fined £4.5 million in the U.K. for misconduct in the audit of Quindell, is giving up non-audit work for the FTSE 350 companies it audits in the U.K. because of conflict of interest concerns, and lost in the finals of the 2018 Auditors Cricket Cup to EY.

And now this:

The Capital Markets Authority (CMA) of the Sultanate of Oman has suspended KPMG from auditing listed entities it regulates [for one year] after finding “major financial and accounting irregularities”.

The CMA launched an inspection of some listed entities and when it discovered the irregularities, it decided to take action to protect investors and stakeholders.

A review examining why the auditors had not discovered or reported these irregularities “established professional negligence on the part of some audit firms that warranted disciplinary measures against them in the interests of the investors and other stakeholders”, the CMA said.

The suspension doesn’t affect engagements to which KPMG has already been appointed. The firm is able to appeal the decision before an independent appellate authority.

In a statement sent to Arabian Business, KPMG said it was “cooperating with the CMA during the review of certain audits dated prior to 2015 and the firm is fully committed to cooperating with the CMA to resolve these matters.”

KPMG also said:

“Audit quality and compliance with professional standards is the highest priority in KPMG. The firm strongly believes that continuously improving audit quality is fundamental to meeting its responsibilities and maintaining public trust,” the statement added.

MarketWatch’s Francine McKenna noted on Twitter that KPMG’s firm in Oman isn’t registered with the Public Company Accounting Oversight Board and doesn’t audit publicly listed companies in the U.S.

2019 can’t come soon enough for the House of Klynveld.

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