In the year to March, the UK accounting watchdog had fined accounting firms nearly £43m, with KPMG making up nearly half of that total
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London — Accounting firm KPMG has been fined £3.5m ($4.24m) by Britain’s accounting watchdog for failing to audit client accounts of BNY Mellon properly, the latest in a string of penalties on KPMG for poor performance.
The fine will keep the pressure on Britain’s government to come forward with legislation that implements a proposed shake-up of auditing, including a more powerful watchdog.
The UK Financial Reporting Council (FRC) said on Thursday that in 2011, BNY Mellon held more than £1-trillion pounds in assets on behalf of its customers, which, under client asset audit standard (CASS) safekeeping rules, must be audited to ensure the assets are being kept safe.
KPMG and Richard Hinton, who signed the client assets report on behalf of KPMG, admitted misconduct, the FRC said.
KPMG said it regretted that aspects of its work did not meet the standards expected by the regulator. “We are happy to undertake the additional review process outlined by the FRC as part of our drive to improve audit quality,” it said in a statement.
The fine was discounted from £5m pounds for admission of misconduct. Hinton’s £75,000 fine was discounted to £52,500, the watchdog said. Britain’s finance industry watchdog, the Financial Conduct Authority, had fined BNY Mellon £126m in April 2015 for failing to keep customer money safe.
In the year to March, the accounting watchdog had fined accounting firms nearly £43m, with KPMG making up nearly half the total after admitting misconduct in audits of The Co- operative Bank, retailer Ted Baker, and professional services firm Quindell.
Adapted from : https://www.businesslive.co.za/bd/companies/financial-services/2019-08-01-kpmg-
Identify and explain each of the internal factors mentioned in the article above. Provide excerpts to support your answer. (10)
Discuss the effects of the external factors on KPMG as an organisation. Provide excerpts from the article to substantiate. (14)
Identify an opportunity and a threat that KPMG can strategically respond to. (6)
QUESTION TWO 
You have been promoted and are to perform the role of a financial manager within the company. Taking this into consideration and the questions that follow:
Identify and discuss the level of management you belong to. (5)
Explain the planning activities you would be involved in as a financial manager. (8)
Outline the importance of the organising function. (6)
Discuss two types of power that you would exhibit as a leader. (8)
Explain two control measures you would use to manage financial resources in an organisation. (8)
QUESTION THREE 
Discuss the importance of management to business. (15)
Explain the role of financial management in an organisation. (10)
Differentiate between top level and lower level management. (10)
Answers to Above Questions on KPMG Case Study
Answer 1: An analysis of the given article indicates that there are many such internal factors that are mention in the given article. One suuch significant internal factor is the inability of KPMG to audit the books of accounts of BNY Mellon. The assets should have been properly audited but it has not been done and this is simply the failure on the part of KPMG to fulfill its responsibility.
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