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The CMVM imposed a fine of one million euros on KPMG’s auditor, the capital market supervisor announced, in a statement released today on its official website. The decision was challenged in court by KPMG, according to the statement.
The origin of the fine is the performance of KPMG as auditor of Banco Espírito Santo. The bank, then led by Ricardo Salgado, was the target of a resolution measure in August 2014 and KPMG has been under fire from supervisors ever since.
According to the supervisor’s statement, it is alleged that the events occurred between 2012 and 2015. According to the entity led by Gabriela Figueiredo Dias, who is in charge of supervising the auditors, KPMG failed in areas such as the relationship between BES and BES Angola ( that caused a breakdown of several billion euros in the parent company and accelerated its collapse), credit to companies of the Espírito Santo Group and valuation of properties on the balance sheet, and also provided false information to supervisors about events of which it had become known as auditor of the group led by Ricardo Salgado.
Among other things, the CMVM concluded that KPMG did not adequately document the audit procedures performed on the loans of some BES clients, and did not prepare or maintain sufficient documentation for the National Audit Supervision Council (CNSA) to properly review its work.
Furthermore, KPMG “did not obtain, to support the audit opinion issued, on the“ customer credit ”of a significant component of the Group (shown in the balance of the Group’s consolidated financial statements), adequate audit evidence and sufficient to support the claims “existence”, “integrality”, “rights and obligations” and “appreciation” (impairment) ”.
At the same time, adds the CMVM, KPMG did not apply “an adequate level of professional skepticism” in the evaluation of the audit evidence obtained on credit from clients of a significant component of the Group, nor does it include – it should – a reservation in the opinion issued. in the Legal Certification of Accounts and in the Audit Report of the BES accounts.
“Arguido gave CNSA false information”
The CMVM also concluded that KPMG “did not prepare or maintain sufficient documentation for CNSA to adequately examine its work, as auditor of the Group, in real estate (recorded in the balance sheet of” fixed assets in progress “and” Other amounts – Sundry debtors “) component “) of a significant component of the Group (shown in the balance sheet of the Group’s consolidated financial statements)” and that acted in such a way as to mislead the CNSA.
“Arguido gave CNSA false information about (i) facts of which it had knowledge, within the scope of the legal review / audit of the consolidated financial statements (for the years 2011 and 2012) of a credit institution that issues securities admitted to trading in a regulated market, referring to the audit work carried out on credit to clients of a significant component of the Group whose accounts were audited; (ii) access to two documents on a significant component of the Group whose accounts were audited by them ”, he added.
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