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KPMG ousts head of financial services unit over misconduct claim

KPMG sign
Image copyrightREUTERS

One of the UK’s biggest consultancies has ousted the head of its financial services consulting division, following a probe into alleged misconduct.

“[It] is bizarre as the decision is under appeal. I have not been given the reason for that decision. I had already resigned from the KPMG partnership.

“I did not believe that the process was fair or would lead to a just outcome. There is no complainant and there were no formal allegations pursued by anyone,” he said.

Mr Howarth led one of the firm’s most important divisions, which generates large amounts of revenue for the company.

His profile has now been removed from the firm’s website.

KPMG under pressure

His dismissal comes as the firm – best known for its accountancy work – tries to restore its reputation following a series of unrelated auditing scandals.

In May, KPMG was fined £5m and “severely reprimanded” after admitting misconduct in its 2009 audit of Co-operative Bank.

In April, it was fined £6m, received another severe reprimand, and was told to undertake an internal review of the way it audited insurance company Syndicate 218 in 2008 and 2009.

Regulator, the Financial Reporting Council (FRC), is also investigating the accountancy giant’s audit of the government contractor Carillion, which collapsed under £1bn of debt last year.

Last year, the FRC said it had found an “unacceptable deterioration” in KPMG’s work and said it would be subject to closer supervision.

KPMG is one of the four largest auditors in the UK, the so called “big four” which also includes PwC, EY and Deloitte.

All four are currently under review by the Competition and Markets Authority (CMA), which has proposed an internal split between their audit and non-audit businesses to prevent conflicts of interest in audits.

Last year, KPMG said it would no longer do consultancy work for the UK’s biggest companies if it was also auditing them, in order to “remove even the perception of a possible conflict” of interest.

About Oluwadamilare Funsho

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