MPs say accountancy corporations face questions over Carillion collapse

LONDON (Reuters) – KPMG and different main accountancy corporations face critical questions over their work with failed building agency Carillion after making hundreds of thousands of kilos out of their relationships with the company, British lawmakers mentioned on Tuesday.

Lawmakers from two parliamentary committees analyzing the collapse of Carillion mentioned that KPMG had earned 29.four million kilos from auditing the contractor’s accounts because the company was based in 1999.

The agency signed off on Carillion’s 2016 accounts, shortly earlier than the development and outsourcing company introduced a string of revenue warnings. Carillion collapsed final month with money owed of over 2 billion kilos.

“KPMG has serious questions to answer about the collapse of Carillion. Either KPMG failed to spot the warning signs, or its judgement was clouded by its cosy relationship with the company and the multi-million pound fees it received,” mentioned Rachel Reeves, chair of the Business, Energy and Industrial Strategy (BEIS) Committee.

“KPMG should, as a bare minimum, review its processes and explain what went wrong.”

KPMG mentioned it will help the inquiry into the failure of Carillion, and can be questioned by the lawmakers on Feb. 22.

“We are committed to building public trust in audit. We take the questions that have been asked of our profession in recent weeks very seriously and we welcome the opportunity to appear before the joint committee,” KPMG mentioned in an announcement.

Lawmakers revealed responses from the “Big Four” accountancy corporations to inquiries on their involvement with Carillion on Tuesday, saying that PwC, KPMG, Deloitte and EY had earned 71 million kilos since 2008 on work associated to the agency.

Labour lawmaker Frank Field, who chairs the Work and Pensions Committee, mentioned it was “telling” that PwC was appointed to liquidate the agency, as the opposite three corporations would have had instant conflicts of curiosity.

“All of them did extensive – and expensive – work for Carillion,” he mentioned. “The image of these companies feasting on what was soon to become a carcass will not be lost on decent citizens.”

Reporting by Alistair Smout; Editing by Susan Fenton

Our Standards:The Thomson Reuters Trust Principles.

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