FRC extends investigations into Carillion’s financial statements

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The Financial Reporting Council (FRC) has extended its investigations into the preparation, approval and audit of the financial statements of Carillion

The extended investigation into Carillion will now include certain matters relating to the financial statements for the year ended 31 December 2013.

The FRC announced on 29 January 2018, its investigation into KPMG’s audit of the financial statements of Carillion plc for the years ended 31 December 2014, 2015 and 2016, and additional audit work carried out during 2017.

The FRC also announced on 19 March 2018, an investigation into the conduct of Richard Adam and Zafar Khan, former Group Finance Directors of Carillion and members of the ICAEW, in relation to the preparation and approval of the financial statements of Carillion for the years ended 31 December 2014, 2015 and 2016, and the six months ended 30 June 2017, and the preparation and reporting of other financial information during the period 2014-2017.

Updates on the progress with the FRC investigations were announced on 16 May 2018 and 22 January 2019. On 22 January FRC revealed it had 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.

Carillion went into liquidation on 15 January 2018, with £7bn of liabilities and just £29m left in the bank. Experts believe that Carillion had been trading while insolvent for several years prior to its collapse.

As a result of the firm’s collapse nearly 3,000 of Carillion’s staff were made redundant with many other workers in the company’s supply chain also losing their jobs. Many of Carillion’s sub-contractors were also forced out of business.

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