KPMG and Anthony Sykes Fined Again for N Brown Audit Failures
KPMG and a former partner, Anthony Sykes, have been severely reprimanded and fined by the Financial Reporting Council (FRC) for failing to meet international auditing standards in their audit of N Brown Group plc's 2022 accounts. This is the third fine for Sykes in the past four years.
The FRC found serious breaches in KPMG's testing of N Brown's asset valuation, including failures in impairment modelling, cash flow forecasts, discount rates, and reconciliation to market value. Despite these issues, the audit failures did not question the truth or fairness of N Brown's FY22 financial statements. KPMG accepted that an element of their audit work did not meet the required professional standard and cooperated fully with the FRC's investigation.
This is not the first time KPMG and Sykes have faced sanctions. In June 2024, they were previously hit with sanctions over their audits of Carr's, a London-listed farm supplies company, due to findings of 'serious' breaches. Sykes resigned as a member of KPMG on 30 September 2022.
KPMG was fined £1.25m (reduced to £710,937.50) and Sykes was fined £51,187.50 (reduced from £90,000) for their roles in the audit failures. They must also pay the investigation costs and have been severely reprimanded. N Brown Group plc was later removed from AIM after being acquired by a company owned by its non-executive director, Joshua Alliance, in a £191m cash acquisition finalized on 12 February 2025.
