KPMG has been given a record sanction of £30 million following the conclusion of the financial reporting council (FRC) investigation into the audit of Carillion.
KPMG have co-operated and made admissions to the investigation and the fine has been reduced by 30% to reflect this admission and co-operation.
The big four firm has been severely reprimanded for its breaches and Peter Meehan, a former partner of the firm was fined £350,000 which was again reduced 30% and was removed from the Institute of Chartered Accountants in England and Wales for 10 years.
Carillion was plunged into liquidation in January 2018 and had just £29 m in cash and liabilities of nearly £7 billion with the loss of thousands of jobs and by delay to construction projects such as the building of hospitals.
KPMG has admitted fault and Jim Holt KPMG’s chief executive called the findings “damning” and was “very sorry the failings happened in our firm”.
He admitted that the work was indefensible and some employees did not do their job properly. Jim Holt said “as an auditor, I simply cannot defend the work that we did in Carillion. As the chief executive of KPMG, I am determined that we face up to their failure, and I am absolutely committed to continuing to work with my colleagues across the business to ensure that nothing like this can happen again.”