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KPMG will be investigated by Britain’s accounting watchdog over its auditing of Ladbrokes owner Entain.
The Financial Reporting Council said on Monday it had launched a probe into KPMG’s audit of Entain’s 2022 accounts.
Entain, the FTSE 100 group which also owns the Coral and Bwin brands, was ordered to pay a £615mn fine in 2023 as part of a deferred prosecution agreement following a years-long probe into allegations of bribery between 2011 and 2017 at its former Turkish unit.
That deal ended a corporate investigation by HM Revenue & Customs, but individual suspects were invited to enter into plea discussions with the Crown Prosecution Service in October 2024.
The new investigation announced on Monday is a blow to KPMG, which has been attempting to improve the quality of its audits as part of a push to repair its reputation and reduce the expense it has faced from fines and lawsuits over its work.
The accounting firm’s reputation had been damaged by a litany of scandals, including the 2018 collapse of its audit client Carillion, an outsourcing company heavily involved in delivering public services.
An investigation found multiple failings in KPMG’s work at Carillion while a separate tribunal found some of its auditors had misled regulators during inspections of their work.
KPMG’s UK chief executive Jon Holt has been attempting to improve the firm’s work, including by creating a specific team dedicated to overseeing its approach to banking audits, which had been heavily criticised by the FRC.
The FRC said its conduct committee had decided to launch the probe into the Entain audit in November, but it did not give details about which aspects of KPMG’s work were being investigated.
KPMG said: “We will co-operate fully with the FRC to conclude this matter as quickly as possible.”
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