Britain’s accounting regulator, the Financial Reporting Council (FRC), has initiated an investigation into KPMG’s audit of Entain’s 2022 financial statements. Entain, the gambling giant behind brands like Ladbrokes and Coral, is now under scrutiny, and the investigation falls under the FRC’s Audit Enforcement Procedure. The FRC’s enforcement division will handle the probe, which was officially announced on Monday.

A spokesperson for KPMG UK commented on the matter, stating, “We will cooperate fully with the FRC to conclude this matter as quickly as possible.” However, Entain chose not to comment on the investigation or whether it is linked to the company’s settlement with HM Revenue and Customs (HMRC) in 2023. The settlement resolved allegations of bribery connected to its former operations in Turkey.
The timing of the investigation into KPMG comes amid growing concerns over the firm’s recent track record, particularly following a series of high-profile audit failures. KPMG faced significant reputational damage after the collapse of British construction company Carillion in 2018, which went into liquidation. In 2023, KPMG was fined £21 million ($26 million) for what regulators called a “textbook failure” in its audits of Carillion.
In December 2023, Entain, formerly known as GVC, reached a deferred prosecution agreement (DPA) with the UK’s Crown Prosecution Service (CPS), ending a multi-year investigation that began in 2019. The investigation focused on potential corporate offenses related to Entain’s former Turkish-facing online betting operations, which it owned from 2011 to 2017. Entain was accused of failing to implement sufficient anti-bribery measures regarding third-party suppliers and former employees.
As part of the settlement, Entain agreed to pay £585 million ($711.65 million), which was recorded as a liability in its 2023 financial accounts. The total payment, however, amounted to £615 million ($759.55 million) after including additional contributions, such as £20 million ($24.70 million) to charity and £10 million ($12.35 million) to cover the costs of HMRC and the CPS. Entain’s chairman at the time of the settlement, Barry Gibson, attempted to distance the company from the past controversies, stating, “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.”
The announcement of the investigation had an immediate impact on Entain’s stock, with shares dropping nearly 2% on Monday morning, making it the worst performer on the FTSE 100 index. Investors have also sought more than £100 million ($123.5 million) in compensation from Entain, claiming the company failed to disclose the bribery and corruption issues surrounding its Turkish division in a timely manner.
KPMG has served as Entain’s external auditor for six consecutive years, according to the company’s latest annual report.
By fLEXI tEAM
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