KPMG-Ireland has been reprimanded and fined by the Institute of Chartered Accountants in Ireland (ICAI) for what the Institute described as an audit that "in terms of efficiency and competence fell below the standards to be expected."
The questionable audit of Powerscreen International subsidiaries Matbro Ltd. and Matbro (NI) Ltd. was conducted for the year ended March, 1997. While parent company Powerscreen was attempting to raise $28 million on the stock market based on strong reported profits, the profits of Matbro subsidiaries were found to be overstated by over $73 million. When the Matbro issue became public, Powerscreen's stock value dropped drastically and several company executives resigned abruptly.
Rather than refuting the criticisms, as the US KPMG firm is doing in an Orange County, California case reported earlier this week, the Irish arm of KPMG firm stated that it "accepts that the work, in this particular case, fell below its own rigorous standards."
According to the Irish institute, KPMG auditors exercised "inadequate application of professional skepticism during the course of the audit." Both KPMG and former audit partner Saunders Graham were formerly censured by the Institute.