Wednesday 1 September 2021 9:30 am

KPMG and ex-partner accused of misconduct in FRC's investigation into Carillion audit

KPMG, ex-partner Peter Meehan and current and former staff at the Big Four accountant are alleged to provided false and misleading information to a City watchdog investigating its audit of collapsed construction giant Carillion.

The allegations are part of a Formal Complaint issued this morning by the Financial Reporting Council (FRC) in connection with the FRC’s current investigations of two audits carried out by KPMG including one for Carillion, whose accounts were signed off as a going concern for the period ended 31 December 2016 not long before it collapsed.

Meehan no longer works for KPMG.

The audit, and preparation, of the last set of Carillion financial statements are the subject of separate probes by the watchdog.

The FRC opened the formal investogation into KPMG’s audit or Carillion in November 2018 and said today’s formal complaint “does not allege misconduct arising from the performance of the relevant audits, nor does it allege that in either case the financial statements had not been properly prepared”.

The FRC said this morning that the Formal Complaint against KPMG also alleges misconduct by Stuart Smith, the engagement partner for the Regenersis audit, who is currently suspended from KPMG.

A KPMG UK spokesperson said: “We take this matter extremely seriously.

“We discovered the alleged issues in 2018 and 2019, and on both occasions immediately reported them to the FRC and suspended the small number of people involved. The allegations in the Formal Complaint would, if proven, represent very serious breaches of our processes and values. We have cooperated fully with our regulator throughout their investigation.”

A tribunal in January 2022 will assess the complaint and rule on whether KPMG, Meehan, Smith and other current and former employees committed misconduct.

Share
Tags: