@retheauditors @premnsikka 1/ UK audit regulator (#FRC) fines #KPMG £1.25m (+ a former KPMG director fined £50k with a severe reprimand) for serious failures in LSE listed electrical product manufacturer/distributor #Luceco’s 2016 #audit (frc.org.uk/news/april-202…). 
2/ Luceco IPO’d on LSE in 10/2016 (130p : £210m mkt cap). Luceco’s long term auditor KPMG ‘triple dipped’ as auditor plus tax & IPO transaction services. Saddled up at Luceco as independent non-exec/on audit committee: Tim Surridge, former partner at KPMG transaction services.
3/ Installed for the IPO, a shiny new CFO, however, the rot had seemingly already set in. Luceco’s 2016 audit report was declared by the FRC as a ‘dud’, but the accounts detailed the rather fabulous level of KPMG’s £1m fees (£116k audit; £857k IPO related; £49k tax & audit).
4/ In 12/2017 Luceco announced a 20% reduction in expected profit due to stock valuation errors, serving up the head of it’s Financial Controller - its share price cratered from 230p to 80p. In 02/2018 Luceco’s CFO was replaced by a KPMG man - it’s share price dropped further.
5/ in 04/2018 Luceco announced it’s disappointing final results for FY 2017 together with news of £5.5m of accounting errors (inventory over-valuation & inter-company reconciliation) in both its 2015 & 2016 accounts. Quite something considering not just …
6/6 the £1m in KPMG fees in Luceco’s 2016 IPO year, but also the ‘exceptional’ cost of another £415k of IPO related ‘incremental staff costs’. In 08/2019, a further ex-KPMG non-exec/audit committee member was appointed.
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