FRC delivers initial investigation report into audit of Carillion plc
News types: Generic Announcement, Investigations, Operating Procedures, Policies and Responsibilities, Statements
Published: 21 September 2020
On 28 August 2020 the FRC delivered its Initial Investigation Report (IIR) in connection with its extensive investigation into KPMG’s audit of the financial statements of Carillion plc for the years ended 31 December 2014, 2015 and 2016 and additional audit work carried out during 2017.
The Report is not published.
Notes to editors:
The FRC aims to complete the first stage of an Enforcement process within two years of the commencement of the investigation, though this depends on its scale and complexity. In audit cases this means completing the factual investigation and either closing the case or providing to the subjects of the investigation a formal report – the IIR - setting out factual findings and breaches of the applicable standards that appear to have occurred. If an IIR is delivered, the subjects have an opportunity to provide representations. Having considered those representations, a decision is made by the Executive Counsel of the FRC whether to pursue enforcement proceedings. If enforcement proceedings are pursued a Decision Notice will be issued outlining the breaches which the Executive Counsel considers to have occurred, and, where applicable, proposing appropriate sanctions to impose. Contested proceedings are ultimately resolved by an independent Tribunal following a public hearing.
It should be noted, however, that the formal investigation report provided to the subjects of the investigation is not published, as no final determination has been made. Where enforcement proceedings are pursued, the substance of any findings or any Tribunal report as applicable is published on the FRC’s website after the case has been concluded and following any appropriate notifications to third parties. In the event that the FRC’s investigations lead to a decision not to pursue enforcement proceedings, the FRC publishes the closure of the matter as soon as practicable thereafter. It is therefore not possible to say when the outcome of an investigation is made public, as this will depend on whether enforcement proceedings are pursued and may ultimately be determined by a Tribunal independent of the FRC.
The Report is not published.
Notes to editors:
The FRC aims to complete the first stage of an Enforcement process within two years of the commencement of the investigation, though this depends on its scale and complexity. In audit cases this means completing the factual investigation and either closing the case or providing to the subjects of the investigation a formal report – the IIR - setting out factual findings and breaches of the applicable standards that appear to have occurred. If an IIR is delivered, the subjects have an opportunity to provide representations. Having considered those representations, a decision is made by the Executive Counsel of the FRC whether to pursue enforcement proceedings. If enforcement proceedings are pursued a Decision Notice will be issued outlining the breaches which the Executive Counsel considers to have occurred, and, where applicable, proposing appropriate sanctions to impose. Contested proceedings are ultimately resolved by an independent Tribunal following a public hearing.
It should be noted, however, that the formal investigation report provided to the subjects of the investigation is not published, as no final determination has been made. Where enforcement proceedings are pursued, the substance of any findings or any Tribunal report as applicable is published on the FRC’s website after the case has been concluded and following any appropriate notifications to third parties. In the event that the FRC’s investigations lead to a decision not to pursue enforcement proceedings, the FRC publishes the closure of the matter as soon as practicable thereafter. It is therefore not possible to say when the outcome of an investigation is made public, as this will depend on whether enforcement proceedings are pursued and may ultimately be determined by a Tribunal independent of the FRC.