REG - Financial RepCouncil - Carillion initial investigation report

CarillionAnnouncement

21/09/2020 08:05

RNS Number : 5549Z
  
Financial Reporting Council
  
21 September 2020
  
 

FRC delivers initial investigation report into audit of Carillion plc
 
                                                                                                                      21 September 2020
 
On 28 August 2020 the FRC delivered its Initial Investigation Report (IIR) in connection with its extensive 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 Report is not published.
 
Notes to editors:
The FRC aims to complete the first stage of an Enforcement process within two years of the commencement of the investigation, though this depends on its scale and complexity. In audit cases this means completing the factual investigation and either closing the case or providing to the subjects of the investigation a formal report - the IIR - setting out factual findings and breaches of the applicable standards that appear to have occurred. If an IIR is delivered, the subjects have an opportunity to provide representations. Having considered those representations, a decision is made by the Executive Counsel of the FRC whether to pursue enforcement proceedings. If enforcement proceedings are pursued a Decision Notice will be issued outlining the breaches which the Executive Counsel considers to have occurred, and, where applicable, proposing appropriate sanctions to impose. Contested proceedings are ultimately resolved by an independent Tribunal following a public hearing.



It should be noted, however, that the formal investigation report provided to the subjects of the investigation is not published, as no final determination has been made.  Where enforcement proceedings are pursued, the substance of any findings or any Tribunal report as applicable is published on the FRC's website after the case has been concluded and following any appropriate notifications to third parties. In the event that the FRC's investigations lead to a decision not to pursue enforcement proceedings, the FRC publishes the closure of the matter as soon as practicable thereafter. It is therefore not possible to say when the outcome of an investigation is made public, as this will depend on whether enforcement proceedings are pursued and may ultimately be determined by a Tribunal independent of the FRC.
 
The FRC's purpose is to serve the public interest by setting high standards of corporate
governance, reporting and audit and by holding to account those responsible for delivering
them. The FRC sets the UK Corporate Governance and Stewardship Codes and UK
standards for accounting and actuarial work; monitors and takes action to promote the
quality of corporate reporting; and operates independent enforcement arrangements for
accountants and actuaries. As the competent authority for audit in the UK the FRC sets
auditing and ethical standards and monitors and enforces audit quality.
 
1.       Past FRC Enforcement Outcomes can be found here.
2.       To meet its responsibility as the competent authority in respect of audit enforcement, the FRC operates the Audit Enforcement Procedure. This procedure applies to the investigation and sanctioning of breaches of the various requirements of the statutory auditors of Public Interest Entities (PIEs) and any other cases retained by the FRC including AIM companies with a market capitalisation in excess of €200m. In brief, the stages of the Audit Enforcement Procedure are: 
·    Initial case examination and decision to investigate
·    Investigation
·    Decision by Executive Counsel as to whether to issue a Decision Notice (a notice with the findings and recommended sanction);
·    Referral to Enforcement Committee and decision by the Enforcement Committee whether to issue a Decision Notice; and
·    Referral to a Tribunal
·    In order for a matter to be referred for investigation by the FRC's Executive Counsel under the Audit Enforcement Procedure, the FRC's Conduct Committee is required to decide whether there is good reason to investigate an Allegation in relation to a Statutory Auditor and/or a Statutory Audit Firm.
 
Investigations are usually conducted by Executive Counsel and the Enforcement division. The FRC's Conduct Committee may direct that the investigation is delegated to a Recognised Supervisory Body (RSB) which will provide an investigation report to the Executive Counsel so that (s)he may decide whether to issue a Decision Notice.
3.       All media enquiries should be directed to the FRC communications team:
·  Kate O'Neill, Director of Stakeholder Engagement and Corporate Affairs, on telephone 07714415229 or email: k.oneill@frc.org.uk.
·    William Boyack, Communications Manager, on telephone: 020 7492 2307 or 07480 210166 or email: w.boyack@frc.org.uk.
4.       If you no longer wish to receive press releases from the FRC please email unsubscribe@frc.org.uk.
 

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