News

Partner Paul Brehony comments on the news that the Financial Reporting Council has fined KPMG £21m over its audit failures in relation to Carillion.

Paul’s comments were published in CDR News on 12 October 2023, and can be found here.

Following a five-and-a-half year investigation into KPMG’s failures in auditing collapsed government contractor Carillion, the Financial Reporting Council has fined the auditor a record £21m. The FRC stated that the fine was imposed after it found that Carillion “was not subject to rigorous, comprehensive and reliable audits in the three years leading up to its demise”.

Commenting on this development, Paul Brehony, Partner at Signature Litigation, said:

“This record fine is reflective of the paucity of the audit work undertaken by KPMG in the lead up to Carillion’s collapse. It is representative of the FRC’s increasing proactivity in policing audit quality and in the fines it is imposing on both firms and individuals. Whilst the Government’s plans to replace the FRC with a new, more powerful regulator remain just that pending legislation, it is reassuring to see the FRC flexing its muscles in this way.”