KPMG fined again
Another week another fine for KPMG over an audit. This time the Big Four firm has been fined £875,000 and served a severe reprimand for its audit of Revolution Bars. The work under examination was audit for 2015 and 2016. Also fined was Michael Frankish, KPMG’s engagement partner on the Revolution account, who faces a penalty of £35,000 and is also severely reprimanded.
Jamie Symington, deputy executive counsel of the Financial Reporting Council, the UK’s audit watchdog, said: “The audit client was a newly listed and relatively small company, but the breaches were nevertheless serious, including lack of professional scepticism.”
Deloitte, EY, KPMG and PwC pull out of Russia
Meanwhile, the war in Ukraine has forced the Big Four audit and accountancy firms to cut ties with their Russian partners.
A statement from KPMG said both Russian and Belarusian outposts would leave the firm networks. The firm said the decision was not about the staff members in those offices. “This decision is not about them, it is a consequence of the actions of the Russian government. We are a purpose-led and value-driven organisation that believes in doing the right thing.”
A PwC statement said: “Our main focus at PwC continues to be doing all we can to help our Ukrainian colleagues and support the humanitarian efforts to aid the people of Ukraine who have been devastated by this invasion.”
Deloitte said it would no longer operate in Russia and Belarus where the firm has 3,000 staff. “Like others, we know our colleagues in Russia and Belarus have no voice in the actions of their government.”
An EY statement said: “This is not something we take lightly. This is heart-breaking as we have over 4,700 colleagues in Russia, who have been a part of our global network for over 30 years and worked side by side with our global, Eastern European and Ukrainian colleagues.”
Crunch time for Apple
Tech giant Apple faces an interesting moment of corporate governance. Investors voted for an independent “civil rights’ audit of the company’s policies and practices.
The resolution said: “A civil rights audit will help Apple identify, remedy and avoid adverse impacts on its stakeholders. We urge Apple to assess its behaviour through a civil rights lens to obtain a complete picture of how it contributes to social and economic inequality.”
Shareholders complained about the lack of Hispanic and Black members on the company’s executive team and low numbers among tech employees. It also raises concern about a female employee placed on indefinite leave after she made allegations of “sexism, harassment and retaliation”.
The company opposed the resolution, saying: “Apple already fulfils the objectives of the proposal in several ways, including through impact and risk assessments, active governance and board oversight, engagement with our communities and key stakeholders and regular, transparent public reporting.”
UK firms aim for gender parity
Good news on the talent planning front: nearly 50% of UK companies and not-for-profits have plans to achieve “gender parity” in their boardrooms, according to research from the Chartered Governance Institute. Sara Drake, the institute’s CEO, said that was good news in the week of International Women’s Day.
“These positive findings put pressure on those organisations which have yet to formulate such plans as they face being left behind,” Drake said. “This is particularly true for those in the 25 per cent of companies reportedly not nurturing their female talent for senior leadership roles.” Let’s hope they listen.
FRC stewardship update
Investors have pleased regulators with their enthusiasm for a revised stewardship code. The Financial Reporting Council (FRC) says there were many more applications to be “signatories” to the UK’s stewardship code than expected.
Mark Babington, executive director of regulatory standards at the FRC, said: “We are pleased that many previously unsuccessful organisations have provided stronger and better tailored explanations on how they apply the code to more effectively demonstrate their stewardship activity and outcomes.”
Thursday is the new Friday
We all want more leisure time, don’t we? Well, Henley Business School has research suggesting less time spent at work may be catching on. A survey by academics at the school find that 65% of business are now implementing a four-day working week for some employees. That figure was 50% in 2019.
The school says a move to an abbreviated working week is a hangover from lockdowns and flexible working during the pandemic.
Dr Rita Fontinha, associate professor of international business and strategy, says: “Organisations are only just beginning to understand what impact the pandemic has had on their business and management culture. Responding positively to the call for greater flexibility could be of huge benefit to the workplace and the greatest silver lining to come from a pandemic that has brought such hardship to many.” Cool.