The Financial Reporting Council (FRC) has initiated an investigation into KPMG, one of the Big Four accounting firms, over its audit of gambling behemoth Entain.
The FRC announced on Monday that it had begun an investigation concerning the audit carried out by KPMG of Entain's consolidated financial statements for the year ending 31 December 2022, as reported by .
In 2020, HM Revenue & Customs (HMRC) launched an investigation into Entain, the parent company of Coral and Ladbrokes, over alleged bribery at a former Turkish subsidiary.
This led to the first-ever deferred prosecution agreement (DPA) for the Crown Prosecution Service (CPS) after Ladbrokes and Coral's owners agreed to settle with HMRC.
Entain agreed to pay a penalty and disgorgement of profits totalling £585m, make a charitable donation of £20m, and contribute £10m towards CPS and HMRC costs.
In October, it was disclosed that the CPS had offered plea discussions with suspects from Entain as it prepares to make charging decisions.
Last August, civil legal action was initiated against the group when law firm Fox Williams filed civil proceedings on behalf of a group of institutional investors following a drop in share value.
On Monday, the FRC confirmed that its decision to initiate an investigation was made at a meeting of the FRC’s conduct committee on 21 November 2024.
The investigation will be conducted by its enforcement division.
A spokesperson for KPMG º£½ÇÊÓƵ remarked on the situation: "We will cooperate fully with the FRC to conclude this matter as quickly as possible."
In the wake of the development, Entain's shares experienced a minor decline on the London Stock Exchange, dropping by just over one per cent.
Market expert Richard Hunter, of interactive investor, commented: "Entain shares slipped following a report that KPMG was being investigated following its audit... adding to pressure which has seen the shares decline by 31 per cent over the last year."
