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KPMG settles with Carillion liquidators over £1.3bn audit negligence claim

The views expressed in this article are those of its author and not necessarily those of ShareSoc.

Another fudge. No-one is going to jail for this disaster. Examples need to be set to deter, to stop this happening again. 

I am appalled at the lack of transparency on the size of the settlement. The article mentions the contingent liabilities already disclosed in the KPMG accounts. We will eventually find out the size of the settlement when KPMG publishes its accounts for 2023, but this probably will not be until mid 2024. 

My iPad conveniently referred me to other KPMG stories, which highlights that Carillion is not a one-off and disasters are still happening, so much so that half of UK accounting fines were to KPMG. 

But my biggest concern is that KPMG partner pay has increased. This suggests that the fines are not big enough, that regulatory fines are just a cost of doing business. 

If there is a silver lining, it is that KPMG refused to sign off on accounts of Adler. Perhaps the lessons are being learnt, albeit painfully slowly and the lack of transparency indicates that KPMG has a long way to progress through the 4 phases of culture change – DENIAL, ACCEPTANCE, PLANNING AND IMPLEMENTATION.

Press coverage

FT link (needs subscription)

This is Money – KPMG settles £1.3bn bill over outsourcer Carillion  (This is Money link is just as good and does not require a subscription to read).
This is Money is the media partner for ShareSoc Investing Basics.





Cliff Weight, Director, ShareSoc

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