BES: Judgment on KPMG’s appeal for the fine of one million euros postponed to the 21st – Companies


The ruling on KPMG’s appeal to the fine of one million euros imposed by the CMVM was postponed, with the Competition Court having granted a period for the auditor to rule on the change in the legal qualification announced today.

Judge Mariana Machado, of the Court of Competition, Regulation and Supervision (TCRS), in Santarém, reported today that the facts in question in the process “are likely to translate, not 63 administrative offenses into a real and effective competition”, as the auditor had been condemned by the Portuguese Securities Market Commission (CMVM), but a “permanent violation of auditing standards”.

The sentence, which was scheduled to be read today, was thus postponed to the next 21st, at 4:00 pm, since KPMG’s defense did not waive the deadline to pronounce on the communicated change, which, in case of conviction, removes the risk of partial prescription because the term starts to run from the last act of certification of accounts, which occurred on April 9, 2014, that is, September 9, 2022.

On the other hand, reducing the number of administrative offenses will have implications, in the event of a conviction, on the amount of the fine that may be applied.

In question, there are alleged violations in the work relating to the individual and consolidated accounts of Banco Espírito Santo (BES), for the financial years 2012 and 2013, namely regarding the duty of the auditor to document, in their working papers, the planning, procedures and proof of audit and also of facts relevant to the work carried out.

Among the facts under analysis are also violations of the duties to obtain adequate and sufficient audit evidence to support the opinion issued in the legal certification of accounts and to issue an opinion with reservations in cases where it was not possible to obtain such evidence or in the event of distortion in the information audited financial statement, refers to the order issued today by Mariana Gomes Machado.

The possible violation of the duties to maintain “an appropriate level of professional skepticism” and to prepare and maintain sufficient documentation for the National Audit Oversight Council (CNSA) to review the work of the Statutory Auditor is also under consideration.

At the beginning of the judgment, on March 18, the auditor considered the fine imposed by the CMVM as “unreasonable” and stressed that, in the part of the matter relating to the Angolan subsidiary of BES (BESA), KPMG Angola had in its portfolio documentation relating to difficulties in obtaining information on the bank’s credit portfolio, which was never consulted by the CNSA or by the CMVM.

In its decision, the CMVM condemned the auditor for practices such as lack of adequate documentation of the audit procedures carried out at BES Angola, in particular regarding the evidence obtained on credit to customers in a unit that was relevant to BES’ consolidated accounts.

On the other hand, KPMG was accused of not including a reserve due to scope limitation in the opinion issued by it in the legal certification of accounts and audit report on the consolidated financial statements of BES for the years 2012 and 2013, related to the impossibility to obtain evidence on the “adequate valuation (impairment) of credit to customers” of BESA, nor to have prepared and kept documents so that this situation could be examined by the CNSA.

KPMG was also accused by the regulator, among other infractions, of having provided false information to the CNSA about facts it had knowledge of, in the context of the audit of the consolidated financial statements for the financial years 2011 and 2012.


Source: Jornal de Negócios by www.jornaldenegocios.pt.

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