KPMG is reportedly closing in on a financial settlement with regulators over its Carillion audit, after responding to the FRC report it was handed over six months ago.
According to Sky News, the Big Four’s response allows it to move to the next stage of the sanctioning process over its handling of the construction group’s audit.
While the next phase has supposedly been reached, a final settlement remains several months away.
A record penalty from the FRC has been predicted by industry sources, meaning it would exceed Deloitte’s £15m Autonomy sanction and most likely reach up to £25m.
A KPMG spokesperson told Sky News: “We are cooperating fully with the FRC’s investigation. We have and will continue to respond appropriately to the initial investigation report.”
The failed audit of Carillion, which collapsed with over £5bn of debt in 2018, has been widely attributed as a key reason for the government’s audit overhaul proposals released yesterday (18 March).
The reforms aim to safeguard British jobs, avoid company failures, and rebuild “people’s confidence in business” by introducing a number of measures that include external regulators, capping market share, and increasing director accountability.
Accountancy Today has contacted KPMG for comment.