UK accounting watchdog to probe KPMG's Carillion audits

IndustriesAssociated Press

Britain's accounting watchdog is opening an investigation into KPMG's audit of construction and services giant Carillion, which collapsed this month, less than a year after auditors certified the company's financial health.

The Financial Reporting Council said Monday that the probe will examine whether KPMG breached "ethical and technical standards." The investigation will cover 2014, 2015 and 2016, together with additional audit work carried out during 2017.

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The probe comes as a parliamentary committee accuses Carillion of trying to "wriggle out" of obligations to the company's pension plan as it continued to pay dividends to shareholders and award "handsome pay packets" to senior executives.

Carillion went into liquidation after it struggled to finance 900 million pounds ($1.24 billion) of debt and a pension deficit of at least 587 million pounds.

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