Organization
KPMG in the U.K.
U.K. firm of the KPMG network (KPMG LLP and KPMG Audit Plc); auditor of Carillion.
- contracts from Carillion (29M GBP, statutory auditor) 1999–2017
Audits of Carillion plc, 2014–2016 (KPMG LLP) and 2013 (KPMG Audit Plc)
- Sanctioned by Financial Reporting Council: fines of £18.55 million (KPMG LLP) and £2.45 million (KPMG Audit Plc) after 30% cooperation discounts, severe reprimands, and a declaration that the audit reports did not satisfy the requirements 12KPMG LLP also paid the regulator’s costs of £5,324,365.68. The regulator said the breaches in the first decision were not dishonest and in most cases not intentional, deliberate or reckless.
Connections 3
member of
sanctioned by
-
Financial Reporting Council
12 Oct 2023
fines of £18.55 million (KPMG LLP) and £2.45 million (KPMG Audit Plc) after 30% cooperation discounts, severe reprimands, and a declaration that the audit reports did not satisfy the requirements
Primary record
12
KPMG LLP also paid the regulator’s costs of £5,324,365.68. The regulator said the breaches in the first decision were not dishonest and in most cases not intentional, deliberate or reckless.
contracts from
Timeline 2 dates
- 1999–2017 Carillion awarded a contract to KPMG in the U.K.
- 12 Oct 2023 KPMG in the U.K. sanctioned by Financial Reporting Council
Proof 4 sources
-
Sanctions against KPMG LLP, KPMG Audit plc and two former partners, Financial Reporting Council, 12 Oct 2023.
Primary record
A total financial sanction of £26,500,000, reduced by 30% to £18,550,000 to reflect the firm’s co-operation and admissions;
A total financial sanction of £3,500,000, reduced by 30% to £2,450,000 to reflect the firm’s co-operation and admissions;
The breaches found in Decision 1 were not dishonest and in the majority of cases were not intentional, deliberate or reckless.
and four findings of a lack of objectivity
KPMG failed to gather sufficient appropriate audit evidence to enable it to conclude that the financial statements were true and fair
Carillion was a very important client for both KPMG and key members of the audit team during the relevant years. This created a risk to their objectivity.
Prior to going into liquidation in January 2018, Carillion was a leading UK based multinational construction and facilities management services company.
-
KPMG handed record fine over audit failures in Carillion demise, Accountancy Age, 12 Oct 2023.
Scholarship & press
“These findings are damning. We have cooperated fully with the investigation, and we accept its conclusions and the sanctions that have been imposed without reservation. I am very sorry that these failings happened in our firm.”
-
KPMG fined a record £21M over Carillion audit scandal, Accounting Today (Bloomberg), 12 Oct 2023.
Scholarship & press
Jon Holt, chief executive officer of KPMG in the U.K.
-
Carillion: Joint Report of the Business, Energy and Industrial Strategy and Work and Pensions Committees (HC 769), UK House of Commons (Business, Energy and Industrial Strategy and Work and Pensions Committees), 16 May 2018.
Primary record
Archived copy
Over 19 years, KPMG charged Carillion £29 million in audit fees, alongside additional charges for taxation and other assurance services.
KPMG said that its independence was not impaired after 19 years auditing Carillion.
Such a long tenure inevitably calls into question whether they could provide the independence and objectivity that is crucial to high-quality audit.
Carillion’s financial statements show that over that period, KPMG never found reason to offer a qualified audit opinion on the accounts.
Page history 1 change
- Add 55 stories, each checked against its sources96e92fe6
Something wrong or missing? Tell us, with a source, or edit this page.