KPMG, the Big Four audit firm, is to face yet another investigation after regulators announced they would probe its work at open-all-hours wine chain Conviviality.
The Financial Reporting Council (FRC) said it would probe the audit of Conviviality for the year ended 30 April 2017.
The watchdog said it was also looking at the conduct of an individual in connection with the preparation of financial statements at Conviviality, but published no names.
The FRC said: “The Financial Reporting Council has commenced an investigation into the audit by KPMG LLP of the financial statements of Conviviality plc (for the 52 weeks ended 30 April 2017). The investigation will be conducted under the Audit Enforcement Procedure.”
Conviviality went into administration on 5 April 2018. The business had grown out of the low-cost alcohol retailer Bargain Booze, and was headed by former Waitrose senior executive Diana Hunter.
During the course of Hunter’s tenure, Conviviality also acquired Wine Rack and Rhythm & Booze. The business also grew to include distribution deals with hotels and bars.
By the time of its collapse, Conviviality had been valued at more than £750m and employed 2,500 people.
Statements to the market prior to administration included two profit warnings and the disclosure of a significant tax bill.
This week, Bill Michael, the head of KPMG in the UK, told The Times that it was time for change in the audit market, though he added he did believe the big audit firms should be forced to separate their audit functions from their advisory services.