The financial reporting council investigates KPMG’s audit of Entain’s 2022 accounts following allegations of corporate corruption.

KPMG, one of the “big four” accounting firms, is under investigation by the UK’s Financial Reporting Council (FRC) over its audit of the 2022 financial accounts of gambling giant Entain, which owns well-known brands such as Ladbrokes, Coral, and Sportingbet.

The FRC has initiated an inquiry into KPMG’s actions, though it has yet to specify the exact nature of the investigation. In response, a spokesperson for KPMG UK stated that the firm would fully cooperate with the regulator to resolve the matter swiftly.

While Entain, formerly known as GVC, has refrained from commenting on the investigation, it did not rule out the possibility that it is connected to an earlier settlement the company reached with HM Revenue and Customs (HMRC) over alleged bribery linked to its former Turkish business operations. The settlement, reached in August 2023, saw Entain set aside £585 million, though the company ultimately paid £615 million, including contributions to charity and covering legal costs.

The bribery investigation stems from Entain’s ownership of a Turkish-facing online betting business between 2011 and 2017, during which the company faced accusations of failing to prevent bribery involving its third-party suppliers and former employees. This led to a deferred prosecution agreement (DPA) with the Crown Prosecution Service (CPS) in December 2023, which enables Entain to avoid criminal proceedings if it complies with strict conditions.

The investigation into KPMG comes at a time of heightened concern for Entain, as its stock has fallen nearly 2% following the news, making it the worst performer on the FTSE 100. Investors are also pursuing more than £100 million in compensation, alleging that the company failed to adequately inform them about the corruption issues in its Turkish division.

Despite the challenges, Entain maintains that it has changed significantly since the controversial events took place, with Barry Gibson, the company’s chair at the time of the settlement, stating that these matters concern a business that was sold six years ago. However, the fallout continues to raise serious questions about the company’s governance and the role of its auditors.