Jon Holt

The Financial Times reported that the department wrote to KPMG warning that the action would be taken if the firm could not guarantee that there would be no further misconduct after a series of accountancy scandals involving firms such as Silentnight.

In August, the FRC fined KPMG £13 million for its audits of Silennight from August 2010 to April 2011. Alongside the £13m fine, KPMG was “severely reprimanded” and ordered to appoint an independent reviewer to conduct a Root Cause Review.

The FRC found that KPMG had a “deeply troubling” conflict of interest in its role in the sale of Silentnight to private equity firm HIG.

The FRC’s Independent Disciplinary Tribunal also ruled that David Costley-Wood, the former head of KPMG Manchester restructuring, “advanced an untruthful defence” at the disciplinary hearing into KPMG’s misconduct in the sale of Silentnight.

Jon Holt, chief executive of KPMG, told The Daily Telegraph: “We are taking this very seriously. I have been clear that it is my personal priority to deal with our legacy issues, take action and learn from them and we are fully engaging with the Cabinet Office to demonstrate the changes we have made and are making to our business.”