The Financial Reporting Council (FRC) has provided further information regarding its investigation into the Carillion collapse
The Financial Reporting Council is investigating KPMG’s audits of Carillion (2014-2017) and the conduct of two former financial directors, Richard Adam and Zafar Khan.
The FRC also opened a further investigation relating to the provision of materials to the FRC by KPMG in connection with the FRC’s Audit Quality Review into aspects of the audit of Carillion for the year end 2016. The decision to open this investigation followed matters self-reported by KPMG.
A key area of focus during the investigations has been the financial performance of Carillion’s major contracts in both the construction and services divisions, and whether Carillion management and its auditors ensured that this was appropriately reported in its financial statements.
The investigations are also considering conduct relating to pension liabilities, goodwill, cash disclosures and going concern.
The FRC has obtained and is analysing significant quantities of documents relating to these areas. Detailed interviews have been conducted with audit team members and Carillion senior executives and further interviews are planned for early 2019.
The matters being investigated by the FRC are complex and are expected to continue well into 2019.
