Posted By Global Banking and Finance Review
Posted on January 25, 2025
By Tommy Reggiori Wilkes and Yadarisa Shabong
LONDON (Reuters) -Britain's accounting watchdog has started an investigation into the audit conducted by KPMG of the financials of bookmaker Entain for the year ended December 2022, it said on Monday.
The Financial Reporting Council (FRC) said its investigation would be conducted by its enforcement division under the Audit Enforcement Procedure.
"We will cooperate fully with the FRC to conclude this matter as quickly as possible," a KPMG UK spokesperson said in an emailed comment.
Entain declined to comment.
The FRC's probe comes after KPMG has suffered a series of hits to its reputation in recent years following several scandals including its auditing of Carillion, the British builder that imploded in 2018. In 2023 Britain's accounting fined KPMG a record 21 million pounds ($26 million) for a "textbook failure" in its audits of Carillion.
Entain, the owner of brands including Ladbrokes and Coral, in 2023 agreed to pay a penalty of 585 million pounds ($711.65 million) under a deferred prosecution agreement with the UK's Crown Prosecution Service relating to alleged bribery offences at the gambling firm's former Turkish unit.
The agreement followed a multi-year investigation into the offences started by Britain's tax authority, HM Revenue and Customs, in 2019.
KPMG is Entain's group external auditor and in 2023 completed its sixth financial reporting audit of the bookmaker, according to Entain's annual report.
($1 = 0.8220 pounds)
(Reporting by Yadarisa Shabong in Bengaluru and Tommy Reggiori Wilkes in London; Editing by Rashmi Aich and Louise Heavens)