Financial Reporting Council says it won鈥檛 cut corners to speed up investigation

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The accounting watchdog looking into Carillion鈥檚 external auditor as well as former finance directors Richard Adam and Zafar Khan has said it will not cut corners simply to get to a decision.

The Financial Reporting Council announced it was looking at KPMG鈥檚 auditing of Carillion鈥檚 accounts between 2014 and 2017 two weeks after Carillion went bust in January. Two months later it began a probe into Adam and Khan.

In an update on the investigation published today following the Parliamentary report into Carillion鈥檚 collapse, the watchdog said 鈥済ood progress鈥� was being made with the investigation and added: 鈥淭he first of many detailed and recorded interviews and fact-finding meetings with those under investigation and other relevant witnesses have been conducted.鈥�

But it admitted it 鈥渢akes several months to prepare, schedule and conduct a series of interviews鈥� and added: 鈥淭he speed of the FRC鈥檚 investigations may also rely on the level of cooperation of those under investigation, audit clients and third parties鈥he FRC will not cut corners to conclude its investigations as that may compromise the integrity of any enforcement action.鈥�

Adam has already taken issue with the MPs鈥� findings, saying he 鈥渞ejects the unwarranted conclusions the committees have reached concerning my role at the company鈥�.

MPs labelled him as the 鈥渁rchitect of Carillion鈥檚 aggressive accounting policies and resolutely refused to make adequate contributions to the company鈥檚 pensions schemes鈥�.

Khan (pictured), who took over from Adam at the beginning of 2017 but was sacked just over eight months later, was described as 鈥渇ailing to get a grip on Carillion鈥檚 aggressive accounting policies or make any progress in reducing the company鈥檚 debt. He took on the role of Finance Director when the company was already in deep trouble, but he should not be absolved of responsibility. He signed off the 2016 accounts that presented an extraordinarily optimistic view of the company鈥檚 health, and were soon exposed as such.鈥�

Carillion collapsed owing 拢2bn to suppliers and racked up a 拢2.6bn pension liability.

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