The FRC has announced that the first stage of its Carillion investigation will now be completed by summer 2020, rather than by January 2020.
The FRC said it now requires more time to investigate the collapse of the construction services company, after the contractor entered liquidation proceedings in 2018.
The FRC first announced it would investigate KPMG’s audit of the financial statements of Carillion in January 2018. Statements for the years ended 31 December 2014, 2015 and 2016, as well as additional audit work in 2017, were all investigated by the council.
In February 2019, the investigatory body also announced the opening of a second investigation relating to the audit of Carillion’s financial statements for the year ended 31 December 2013.
The FRC claims that the investigations of the audit are “well advanced”, yet due to the “complexity” of the case and the “substantial volume of material” that must be investigated, more time will now be required to complete its first stage.
The body said it was also investigating the conduct of Richard Adam and Zafar Khan, former group finance directors of Carillion, as well as an additional investigation into KPMG in connection with the audit of Carillion for the year ended 2016. It said that these investigations “inevitably impacted on the the audit investigations and their progress”.
In a statement, the FRC said: “The scale and complexity of this case is exceptional, with a huge volume of documents and information that has had to be reviewed and analysed.
“The investigation encompasses a four-year period, and numerous significant audit areas, including the accounting for construction and services contracts, pensions liabilities, goodwill and going concern.”
It added: “All of the accounting years and each of the audit areas identified remain under active consideration. The FRC therefore currently expects to complete the first stage of its investigation by summer 2020, rather than by January 2020.”