FRC opens investigation into Carillion’s financial statements audit

By Caroline Salls

Pittsburgh, Jan. 29 – The Financial Reporting Council (FRC) will open an investigation related to an audit of Carillion plc’s financial statements performed by KPMG following enquiries made since a profit warning in July 2017, according to a news release.

The investigation will cover 2014, 2015 and 2016, as well as additional audit work carried out during 2017.

The FRC said the investigation will be conducted by its enforcement division and will consider whether the auditor has breached any relevant requirements, in particular the ethical and technical standards for auditors.

Several areas of KPMG’s work will be examined including the audit of the company’s use and disclosure of the going-concern basis of accounting, estimates and recognition of revenue on significant contracts and accounting for pensions.

The FRC said it is working closely with Carillion’s official receiver, the Financial Conduct Authority, the Insolvency Service and the pensions regulator to ensure that there is a cooperative approach to the investigation of “all matters arising from the collapse of Carillion.”

Wolverhampton, England-based Carillion is a facilities management and construction services company.

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