UK Watchdog Opens Investigation Into KPMG and Accountants Over Wood Group Audits
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The Financial Reporting Council (FRC) has officially launched regulatory investigations into Big Four accounting firm KPMG and two individual accountants concerning the financial reporting and statutory auditing of Scottish engineering and consulting firm John Wood Group.
The investigation follows the delisting of John Wood Group from the London Stock Exchange in March after its acquisition by Dubai-based entity Sidara. In the same month, the Financial Conduct Authority (FCA) slapped Wood Group with a nearly £13 million fine for publishing misleading financial results and failing to maintain proper internal accounting controls. According to the FCA, the group’s accounting judgments were inappropriately manipulated following underperformance in key projects to align with previously reported financial targets.
Following the initial exposure of financial reporting irregularities in November 2024, Wood Group’s share price plummeted by more than 70% to approximately 28p.
Scope of the FRC Investigation
The FRC’s Conduct Committee approved the double-pronged probe following a meeting in mid-2026:
- Accountants’ Conduct: The first inquiry under the Accountancy Scheme examines how two individual accountants prepared financial information and communicated with statutory auditors regarding Wood Group’s ‘Projects Business Unit’ between 2022 and 2024.
- KPMG Statutory Audit: The second probe under the Audit Enforcement Procedure focuses on KPMG’s statutory audit of John Wood Group’s consolidated financial statements for the 2023 financial year.
A spokesperson for KPMG UK confirmed the firm’s intent to fully cooperate with the regulator to resolve the matter swiftly.
Wider Regulatory Scrutiny
The investigation into KPMG comes amid heightened activity from the UK audit watchdog. In recent weeks, the FRC has launched separate inquiries into financial misreporting claims at Battersea Power Station as well as the accounting practices of collapsed mortgage lender Market Financial Solutions.
Source / Reference: City A.M.