The Financial Reporting Council (FRC) said the number, range, and seriousness of the deficiencies in the audits of Carillion were exceptional, resulting in the watchdog's highest ever fine.
On occasions, KPMG audit partner Peter Meehan told his team to record his review of working papers without having done a review, the FRC said.
Meehan, no longer with KPMG, was fined 350,000 pounds after a discount to reflect his cooperation and admission of failures.
It would have been 30 million pounds, but was discounted due to admissions and co-operation by the auditor.
KPMG was fined 14.4 million pounds last year after providing false and misleading information to the FRC during spot checks on audits of Carillion and outsourcing firm Regenersis.
Persons:
Reinhard Krause, Carillion, Richard Moriarty, Moriarty, Peter Meehan, Meehan, Jon Holt, Holt, Huw Jones, Sharon Singleton, Mark Potter
Organizations:
KPMG, Canary, REUTERS, BHS, Council, FRC, PwC, Deloitte, EY, Thomson
Locations:
London, Britain