Outcome of UK probe into Carillion audit delayed until summer

Carillion

10/01/2020 12:55

LONDON, Jan 10 (Reuters) - Findings from an investigation
into KPMG's audit of collapsed UK builder Carillion won't be
available until the summer, Britain's accounting watchdog said
on Friday.
    The Financial Reporting Council (FRC) said two years ago it
had opened an investigation into KPMG's auditing of Carillion.
    The FRC said in an update on Friday that the investigation
was well advanced, having reviewed a substantial volume of
material, including papers from internal and external auditors.
    "An independent expert is now considering our analysis in
order to provide an expert opinion on whether there were
breaches of auditing standards," the FRC said.
    The FRC is also investigating the conduct of two former
Carillion finance directors.
    The scale and complexity of the case was "exceptional",
covering audits for four years, the watchdog said.
    "The FRC therefore currently expects to complete the first
stage of its investigation by summer 2020, rather than by
January 2020," it added.
    The collapse of Carillion prompted UK lawmakers to demand a
shake-up of auditing in Britain, a sector dominated by KPMG, EY,
Deloitte and PwC, known collectively as the Big Four.
    Three government-backed reviews have made recommendations to
reform the audit market and scrap the FRC, some of whose past
investigations have drawn criticism for the many years taken to
reach a result.
    The FRC, described by lawmakers as too timid in dealing with
auditors, already has a new CEO and Chair. It is set to be
replaced by a more powerful regulator under legislation expected
this year.

 (Reporting by Huw Jones; Editing by Alex Richardson)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))