Key facts
- The FRC is investigating KPMG and two accountants over John Wood Group's financial reporting and audits.
- The investigation covers the period across 2022, 2023, and 2024 for prepared financial information and auditor communications.
- KPMG's statutory audit of John Wood Group's 2023 financial statements is also under scrutiny.
- John Wood Group was delisted in March following its acquisition by Sidara.
- The company previously paid a £13m fine for misleading financial results and inadequate market controls.
The Financial Reporting Council (FRC), the UK's audit watchdog, has initiated two separate regulatory investigations into the accounting and auditing practices related to John Wood Group. The probes target the Big Four firm KPMG and two individual accountants. The investigation will examine how financial information was prepared and communicated with auditors concerning John Wood Group's 'Projects Business Unit' for the years 2022, 2023, and 2024. Additionally, KPMG's statutory audit of the group's consolidated financial statements for the 2023 financial year is also under scrutiny.
John Wood Group, an engineering and consulting business formerly listed on the London Stock Exchange, was delisted in March after being acquired by Dubai-based Sidara. This development follows a significant fine of nearly £13 million imposed by the Financial Conduct Authority (FCA) in March. The FCA found that the Group had published misleading financial results and failed to maintain adequate market controls, with accounting judgments being inappropriately influenced by a desire to meet previously stated financial outcomes after poor project performance. News of these inaccuracies first emerged in November 2024, leading to a substantial drop in the firm's stock value.