U.K. FRC clamps down on poor audit work
The Big Four firms will face potential fines of £10 million or more for serious misconduct starting in June, as announced by the Financial Reporting Council (FRC). This follows a study in November 2017 by former judge Christopher Clarke, which recommended an increase in fines. The decision means that PwC, KPMG, EY and Deloitte could be paying twice the record amount to date agreed by an independent tribunal of £5.1 million for negligent auditing. FRC said the penalties will be lowered in line with the level of cooperation during investigations. The change is part of the regulator’s bid to maintain its credibility following criticisms of being too slow to respond to firms caught up in company scandals, according to Reuters.
Embattled KPMG SA audits own staff
KPMG South Africa has decided to audit its own staff in a bid to restore public trust in the firm, following its scrutinized audit work of VBS Mutual Bank, which collapsed in March, and companies linked to the politically connected Gupta family. Background checks will be conducted every two years by an independent party, and will take place along with an 18-month review of KPMG’s past work, Wiseman Nkuhlu, Chairman of the firm, told the media. This comes as two of the auditor’s partners, Sipho Malaba and Dumi Tshuma, resigned this month after facing disciplinary charges related to work done for VBS. The lender was put into administration after it was unable to repay some of its clients’ deposits.
Andersen Tax seeks to expand globally
Andersen Tax revealed plans to expand across continents and double in size by the end of the 2019. Following the settling of a dispute last year with a French firm over the rights of the Arthur Andersen name, the firm has since launched practices in regions such as the Middle East, Africa, Latin America, Europe and is now eyeing Asia and Australia, reported Accounting Today. Chief Executive Officer Mark Vorsatz expects the firm to finish its buildout in the Middle East in the next 12 months and Africa in the next two years.
RSM acquires NetSuite solution provider
RSM U.S. LLP has acquired Explore Consulting, an Oracle NetSuite solution provider, adding 60 professionals to their team, according to Accounting Today this month. The firm views NetSuite as a very important cloud platform, and says the acquisition will propel them further into the e-commerce and retail industries, following its purchase of NetSuite provider First Hosted last year. “Most of the time, software in the cloud or out of the box can set 95 percent of a company’s needs, but you need strong IP and developers who can finish that last 5 percent and customize it to all the needs of our clients,” RSM U.S.’s National Consulting Leader, Brian Becker, was quoted as saying.