KPMG and PwC fined over Eddie Stobart audits

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Two of the world’s biggest accounting firms and a partner at each company have been fined over the audits of Eddie Stobart Logistics in 2017 and 2018.

The Financial Reporting Council, the UK accounting watchdog, on Thursday fined KPMG £877,000 and former partner Nicola Quayle £45,500, and gave both severe reprimands, after it determined that the 2017 audit report “did not satisfy the relevant requirements”.

It also fined PwC £1.99mn and partner Philip Storer £51,000 and gave both severe reprimands after it ruled that the 2018 audit of Eddie Stobart Logistics “did not satisfy the relevant requirements”.

The fines were reduced after the firms and partners co-operated with the inquiry.

The investigations were launched in May 2020 after Eddie Stobart, known for its fleet of green and red lorries, discovered that its 2018 profits had been overstated by £2mn.

The errors in the accounts of the company that almost went bankrupt in 2019 were identified following a review by chief financial officer, Anoop Kang, who joined the company in April 2019 and resigned in April 2020.

PwC apologised that its “work was not of the required standard”. KPMG said it regretted that its work “fell short of required standards”.