KPMG hit with watchdog’s Carillion report
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.