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UK regulator to probe KPMG's audits of insolvent Carillion

Staff Writer |
The UK accountancy watchdog is to open an investigation into accountancy firm KPMG over its audits of collapsed construction and services company Carillion.

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The Financial Reporting Council said that, following inquiries made since Carillion's profit warning in July, it will open an investigation under the Audit Enforcement Procedure.

The probe will cover the years ended 2014, 2015 and 2016, and additional audit work carried out during 2017.

The investigation will be conducted by the FRC's Enforcement Division and will consider whether the auditor has breached any relevant requirements, in particular the "ethical and technical standards" for auditors.

KPMG's audit of the company's use and disclosure of the going concern basis of accounting, estimates and recognition of revenue on significant contracts and accounting for pensions will all come under the FRC's microscope.

The FRC also pledged to conduct the investigation "as quickly and thoroughly as possible".

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