KPMG inserting Brexit clauses in audits in sign that accounting firms distancing themselves from potential collapses triggered by political chaos
KPMG is inserting Brexit clauses in its audits in a sign that accounting firms are distancing themselves from potential collapses triggered by political chaos.
It is the first of the ‘Big Four’ auditors to add warnings to company reports saying it cannot be held accountable if Brexit ravages an audited business’s balance sheet.
Auditors have already come under fire for failing to spot problems at firms such as Carillion which failed a year ago.
And last week, David Dunckley, the boss of Grant Thornton, which is under investigation for checks it carried out on the owner of Patisserie Valerie before its collapse, claimed its job was not to uncover fraud at clients.
Planning ahead: It is the first of the ‘Big Four’ auditors to add warnings to company reports saying it cannot be held accountable if Brexit ravages an audited business’s balance sheet
KPMG’s Brexit clause first appeared in its audit report on Anglian Home Improvements. Anglian has blamed Brexit for reduced consumer confidence and a fall in sales.
KPMG signed off Anglian’s accounts as a ‘going concern’ – but noted that Brexit is ‘one of the most significant economic events for the UK’, adding:
‘No audit should be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit.’
A KPMG spokesman said: ‘With Brexit now widely accepted as presenting a range of potential risks and uncertainties for most businesses, we are giving particular consideration to its potential impact on each of the companies we audit.’
Anglian’s turnover fell from £237 million to £227.6 million in the year to March 2018, with pre-tax losses widening from £3.3 million to £5.2 million.