Could it be Britain’s worst listener? Nicola Quayle probed again

Could it be Britain’s worst listener? Nicola Quayle has already been fined £150,000 – and is now being investigated for the third time

Blind spot: Nicola Quayle signed Eddie Stobart’s accounts

A former KPMG senior partner is being investigated over the audit of haulage firm Eddie Stobart – having already been fined a total of more than £150,000 for two other botched jobs.

Britain’s accountancy watchdog is looking into Nicola Quayle’s role in auditing the lorry company, which nearly collapsed more than two years ago, The Mail on Sunday can reveal. Quayle, 52, who ran KPMG’s Manchester office, signed the audit under investigation.

The bombshell revelation comes just weeks after she was fined £110,000 and scathingly reprimanded by the Financial Reporting Council (FRC) for auditing Conviviality, the owner of unlicensed Wine Rack and discount chain Bargain Booze. It fell into administration in 2018.

She was also hit with a £45,000 fine in 2020 by the watchdog in relation to the audit of an anonymous firm. In addition to the monetary penalty, she was reprimanded and ordered to undergo training.

Fines have been reduced to £80,850 and £29,250 respectively for prompt payment.

A chartered accountant said he had ‘never seen a case like this’ where a senior partner had been investigated in three separate audits. It comes just days after KPMG revealed that the average annual rewards given to its partners had climbed by a fifth to £688,000 last year due to increased advisory work on corporate transactions.

Quayle, who led the Manchester office for two years until December 2019, was also a non-executive director on the KPMG UK board. She continues to work with the company on a contractual basis, participating in a number of internal projects. It does not perform audits or work in contact with the client. The investigation into his audit of Eddie Stobart has so far been kept secret. It is not uncommon for the FRC to investigate key people during an audit.

The haulier, whose brightly colored red and green lorries are a familiar sight on the motorways, was on the brink of collapse in 2019 after it emerged profits were overstated by £2million the year former. Shares in the logistics company were suspended in August 2019 for six months after a profit warning was issued. Chief Executive Alex Laffey has resigned.

The errors were discovered by Eddie Stobart’s chief financial officer at the time, Anoop Kang – but KPMG, which was supposed to audit the accounts, gave a true and fair view, did not sound the alarm. KPMG resigned as auditor after its 2017 audit, blaming “a breakdown in our relationship with management”.

The firm added that this was due to problems obtaining the evidence it needed to carry out its audit of the business for the year ending at the end of November 2017. Rival audit giant PwC was appointed after KPMG withdrew.

Watchdogs have launched an investigation into the 2017 KPMG audit, which was signed off by Quayle, and the 2018 PwC audit.

Leads to distraction: Transport company Eddie Stobart nearly collapsed more than two years ago

Leads to distraction: Transport company Eddie Stobart nearly collapsed more than two years ago

The truck business was a stock owned by disgraced fund manager Neil Woodford, one of the company’s major shareholders at the time its shares were suspended.

The latest development is another setback for KPMG, which has come under fire for a series of audit failures. It was the company responsible for checking the books of Carillion, the construction company that went bankrupt in 2018.

KPMG chief executive Jon Holt admitted last month that the company misled the FRC during its audit. A disciplinary court heard that some of its auditors had fabricated false documents to deceive the regulator. Carillion liquidators are now suing KPMG for £1.3billion.

He has also been criticized for his audits of the collapsed Co-op Bank, bed company Silentnight, insurance underwriting agent Equity Syndicate Management and insurance contractor Quindell. Meanwhile, KPMG Switzerland failed to spot the corruption scandal at FIFA. He had audited world football’s governing body since 1999.

A series of corporate collapses involving failed audits by all major firms prompted the government to enact sweeping reform of the accountancy profession, which includes the creation of a new watchdog to replace the FRC.

City veteran Jan Du Plessis, former chairman of BT, has been named the new chairman of the FRC as it is being transformed into the new, supposedly stricter audit, reporting and governance authority . The FRC, which imposed £16.7m in financial penalties in 2021, declined to comment. Quayle also declined to comment.

KPMG said: “We note the FRC’s announcement regarding the initiation of an investigation into the audit of Eddie Stobart Logistics for the year ended 30 November 2017. We will cooperate fully with the FRC in concluding this business as soon as possible.”

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