KPMG hit with watch­dog’s Car­il­lion re­port

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

THE ac­count­ing watch­dog has de­liv­ered a long-awaited re­port set­ting out pos­si­ble breaches of pro­fes­sional stan­dards by KPMG in its au­dit of col­lapsed govern­ment con­trac­tor Car­il­lion.

The Fi­nan­cial Re­port­ing Coun­cil said it sent its ini­tial in­ves­ti­ga­tion re­port to KPMG on Aug 28 fol­low­ing its re­view of the firm’s au­dit of Car­il­lion’s ac­counts in 2014, 2015 and 2016, along with ad­di­tional work dur­ing 2017.

The in­quiry was opened in Jan­uary 2018, two weeks af­ter Car­il­lion fell into liq­ui­da­tion, and would nor­mally be com­pleted within two years.

How­ever, the watch­dog said in Jan­uary that it would miss its self-im­posed dead­line be­cause of the size and com­plex­ity of the in­ves­ti­ga­tion. Car­il­lion’s col­lapse sparked calls for a shake-up of the Big Four au­di­tors af­ter a string of high-pro­file fail­ures.

KPMG has eight weeks to re­spond to the re­port, which has not been pub­lished, af­ter which the FRC will reach a fi­nal de­ci­sion. Should it con­clude KPMG breached pro­fes­sional stan­dards, the firm must choose whether to co-op­er­ate, which may re­sult in a re­duced fine, or con­test the find­ings be­fore an in­de­pen­dent tri­bunal.

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