The UK’s Financial Reporting Council (FRC) has issued a press notice informing of an investigation into KMPG over its auditing of Entain accounts.
Conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure, the investigation refers to the audit of the FTSE 100 gambling group’s consolidated financial statements ending 2022.
A KPMG spokesperson commented: “We will cooperate fully with the FRC to conclude this matter as quickly as possible.”
While no details were given as to the exact reasoning behind the investigation, a notorious settlement with HM Revenue and Customs involving Entain took place in close proximity to the specified period.
In 2023, the operator of brands like Ladbrokes and Coral paid £615m in a settlement case that revolved around alleged Bribery Act shortcomings connected to its former Turkey-facing online betting and gaming venture Headlong Limited.
An HMRC investigation was launched in 2019 against the entity owned by Entain (then GVC) between 2011 and 2017 on the basis of “potential corporate offending”, resulting in an accusation that Entain was missing the required procedures to prevent bribes and corruption practices.
At the end of 2023, the Crown Prosecution Service (CPS) granted Entain a deferred prosecution agreement (DPA), which is a voluntary agreement between a commercial entity and a prosecutor that allows the former to avoid prosecution for economic crimes under certain conditions.
In this case, the conditions were a financial penalty totalling £585m, a charitable donation of £20m, as well as covering CPS and HMRC costs with a £10m contribution.
Barry Gibson, Chair of Entain at the time, then commented: “This legacy matter concerns a business which was sold by a former management team six years ago.
“The group has changed immeasurably since these events took place.”
Interestingly, last year Entain sued the former owners of Dutch online casino BetCity for an allegedly fraudulent acquisition deal that also took place in 2022.