The Financial Reporting Council (FRC) is to grill former Carillion executives as the investigation into the company’s collapse hits a critical phase.
The FRC has said further interviews with former Carillion employees, as well as those involved in the company’s audits are scheduled for the next few weeks, in an update to its ongoing investigation.
This month marked the first anniversary of Carillion’s collapse. The investigation was launched in January 2018.
“Detailed interviews have been conducted with audit team members and Carillion senior executives and further interviews are planned for early 2019,” the FRC confirmed in an update.
”The matters being investigated by the FRC are complex and are expected to continue well into 2019. They are a critical stage in the process, the findings of which form the bedrock on which any regulatory proceedings are based.”
Also under scrutiny are KPMG’s audits of Carillion between 2014 and 2017 and the conduct of two former finance directors, Richard Adam and Zafar Khan.
The FRC has also opened an additional investigation into the provision of material related to the audit of Carillion in 2016 submitted for assessment by KPMG. This investigation was opened fafter it received a report from KPMG.
In December, the Competition and Markets Authority (CMA) proposed a number of changes to the country’s auditing process, following failures of big firms such as Carillion.
Among its recommendations, the CMA said that work by the big four auditors PwC, KPMG, EY and Deloitte should be cross-checked by other auditors following a number of accounting scandals.
A KPMG spokesperson said the comapny was cooperating fully with the FRC.
“We are taking this matter extremely seriously and have engaged outside legal counsel to conduct an investigation into the circumstances of the Audit Quality Review and the conduct of the individuals involved. We acted swiftly and decisively and will continue to take all necessary steps to deal with this, including cooperating fully with the FRC.”
The investigation is expected to continue well into 2019.