Investigation Launched by UK Authority on KPMG's Audit of Entain, Parent Company of Ladbrokes
The Financial Reporting Council (FRC), the UK's foremost regulatory body for accounting and auditing, has launched a probe into KPMG over their audit of top gambling group, Entain. The exact nature of the investigation, related to Entain's financial year ending December 31, 2022, remains undisclosed.
KPMG, Entain's auditor since 2018, has confirmed they'll cooperate fully with investigators, aiming to wrap up the matter promptly. However, the firm has been under fire for various issues in recent times.
The FRC dished out a staggering £33.2m ($41m) in penalties to auditors in 2023, with KPMG involved in approximately 80% of the cases. The heaviest of these fines, £21m ($26m), was slapped on KPMG for lapses in the three years preceding the collapse of former contractor, Carillion.
Entain hopes the investigation doesn't unearth any troublesome findings. In 2023, they set aside a significant sum of £585m ($719m) for a settlement following an HM Revenue & Customs (HMRC) inquiry into historic bribery offenses in their Turkish unit.
Troubled Waters for KPMG
Notably, KPMG has been navigating choppy waters in recent times. In March 2025, the Public Company Accounting Oversight Board (PCAOB) sanctioned KPMG's affiliates in multiple countries for violations of PCAOB rules and quality control standards, incurring fines totaling $3.375 million across various KPMG offices worldwide.
In April 2025, the PCAOB also fined KPMG's Netherlands affiliate, KPMG Accountants N.V, a hefty $25 million for improper practices related to internal training and monitoring of quality control systems.
Moreover, KPMG faced criticism for its audits of regional banks in the U.S. and was fined in India for lapses in auditing Coffee Day Enterprises. The FRC also fined KPMG, albeit the exact amount remains undisclosed, in March 2025.
In light of these developments, the FRC's investigation into KPMG's audit of Entain is worth keeping an eye on. As the probe unfolds, transparency and honest financial practices will be under scrutiny, setting a precedent for the UK's auditing industry.
In light of KPMG's recent sanctions by the Public Company Accounting Oversight Board (PCAOB) in various countries and an undisclosed fine from the FRC in March 2025, the ongoing investigation by the Financial Reporting Council (FRC) into KPMG's audit of Entain is of significant importance. The probe could potentially reveal insights into the casino-and-gambling industry's financial practices, given KPMG's history of controversies in business and finance sectors.
