WEEKLY EDITION BY MARINA MOUKA

Welcome to your latest Accountancy Age’s Weekend Digest, your go-to source for the week’s top insights and updates tailored for accountants.

In this edition you’ll find:

◾ KPMG hit with £1.25m fine for using conflicted auditor in Carr’s Group engagement.

◾ FRC unveils UK version of global ESG assurance standard, aiming for trust without red tape.

◾ MPs slam HMRC after £47m phishing scam exposes weaknesses in digital defences.

NEWS

KPMG fined £1.25m for Carr’s Group audit breaches

KPMG has been fined £1.25m by the Financial Reporting Council over serious audit independence breaches during its 2021 audit of Carr’s Group. The firm relied on a component auditor with long-standing ties to the client, violating the FRC’s Ethical Standard and international audit rules.

While the audit’s quality wasn’t questioned, the FRC flagged basic failures in oversight and independence. KPMG and partner Nick Plumb received reduced penalties for cooperation. The case reinforces mounting scrutiny over independence compliance in the audit profession.

NEWS

FRC sets out plans for UK sustainability assurance standard

The FRC has launched a consultation on ISSA (UK) 5000, a new sustainability assurance standard aligned with the international ISSA 5000. Set for voluntary adoption from December 2026, the UK version introduces only one additional safeguard—to bar internal auditors from assisting in sustainability assurance.

The FRC says this move will strengthen confidence in ESG disclosures without creating new burdens for firms. The consultation is open until 31 July and has received early backing from the ICAEW and broader assurance community.

NEWS ANALYSIS

HMRC hit by £47m phishing fraud, MPs question digital defences

HMRC has lost £47m to a major phishing fraud in which criminals used stolen credentials to hijack or create around 100,000 PAYE accounts. Officials confirmed the data breach did not originate within HMRC’s systems, but MPs have criticised the department’s delayed disclosure.

A cross-border investigation has led to arrests, while HMRC has pledged stronger digital defences, including multi-factor authentication for agents. The scandal comes amid growing concerns over the department’s digital resilience and the delayed rollout of Making Tax Digital.