BT Has Financial Reporting Internal Control Weaknesses per KPMG Review

Compliance Week has dug up a May 21 letter from audit firm KPMG to the board of directors of BT that stated the UK telco “did not maintain effective internal control over financial reporting” for the financial year ending 31st March 2020. The letter was filed with the US Stock Exchange Commission (SEC) and observes there were “material weaknesses” relating to “General IT Controls and Risk Assessments”.

BT appointed KPMG to be their external auditors in June 2018. KPMG replaced PwC after costly irregularities were found with the accounts of BT’s Italian business.

The letter from KPMG was produced alongside BT’s 2020 financial statements. KPMG gave an unqualified audit opinion that the statements gave a true and fair view of the state of BT’s affairs.

BT’s annual report noted the need for remediation work for IT general controls and risk assessment, but that the work had not been fully completed during the year.

When asked about KPMG’s letter, a spokesperson for BT told City AM:

…there were “no financial inaccuracies in BT’s accounts for this year or last”, and that KPMG’s statements related to a technical issue.

The spokesman added that the accounting issues highlighted by KPMG in BT’s latest report are unrelated to its Italian business, and instead involve American Sarbanes-Oxley accounting regulations.

You can read the Compliance Week article here.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.