Defined BenefitFeb 13 2018

Big Four earned £7m a year from Carillion

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Big Four earned £7m a year from Carillion
ByMaria Espadinha

Regarding KPMG, which signed off Carillion’s latest accounts and is now being investigated by the Financial Reporting Council (FRC), the committees said that “they do not accept any suggestion of blame but assert they conducted their work ‘appropriately and responsibly’”.

The MPs said, from the firm’s response, KPMG reduced their total audit fees from £1.8m to £1.4m between 2008-2016, despite their hourly fees increasing over that period.

“Does that could suggest that they were cutting back on the work they were performing, relying on past assurances they had?” the committees question.

Representatives from the firm will appear before the committees in a hearing on 22 February.

Labour MP Rachel Reeves, chair of BEIS committee, said: “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. 

“For the sake of all those who lost their jobs at Carillion and in the interests of better corporate governance, KPMG should, as a bare minimum, review its processes and explain what went wrong.”