KPMG’s Carillion audit probe

KPMG will be investigated over Carillion’s books which it signed off before the constructor went bust.

Carillion went into liquidation on January 12 with debts of up to £5bn including a pension deficit of up to £2.6bn.

The auditing group had signed off the business’ annual report and accounts only nine months earlier.

KPMG has been Carillion’s auditor since 1999, earning £29.9m. The Financial Reporting Council watchdog said it would investigate audits for the years ending December 2014, 2015 and 2016, and work done during 2017.

KPMG is also being investigated by the FRC for its audit of engineer Rolls-Royce’s accounts while the company bribed its way into contracts around the world.

KPMG said: ‘We believe that we conducted our role as Carillion’s auditor appropriately and responsibly.’