‘Nothing has changed\u2019: Two years on from Carillion collapse<\/p>\n<\/p>\n
Despite promising to have the first stage of its investigation into KPMG\u2019s auditing of the outsourcing giant finished, the Financial Reporting Council this week said it needs another six months.<\/a><\/p>\n The investigation, the initial part of which is now due in the summer, spans a four-year period, has proven so complex the regulator has brought in outside counsel as it continues to sift through \u201ca huge volume of documents and information\u201d.<\/p>\n \u201cThe scale of the task of analysing the collapse of a massive complex enterprise is more complicated than was anticipated and then there is the difficulty and some would say unwillingness to assert auditing failure,\u201d said Patrick Elliot a corporate recovery and insolvency specialist at Keystone Law.<\/p>\n Further delays have done little to quell feeling within the accounting sector that appetite for reform is waning, despite a busy 2019 in which multiple reviews and investigations ran concurrently.<\/p>\n In July, Andrea Leadsom replaced Greg Clark as business secretary and two months later closed the department\u2019s consultation on the CMA\u2019s proposals<\/a> without outlining any future plans. Last month Sir John Kingman<\/a>, who has overseen a separate bid to replace the Financial Reporting Council also criticised the UK government for making only a passing reference in the Queen\u2019s Speech to his proposals.<\/p>\n Andrew Tyrie, chairman of the Competition and Markets Authority (CMA) and one of the most vocal proponents of splitting up the Big Four and separating the functions of audit and accounting, has reportedly held private dinners with the chairman of KPMG, EY, and other industry leaders, on these matters.<\/p>\n \u201cThere have been calls for reform to the auditing industry for numerous years, particularly for the split of auditing and non-auditing services provided by the accounting firms,\u201d said Elliot. \u201cAny suggestion of auditing failure at a business the size of Carillion would turn out to have significant\u00a0political consequences and would need to be uncontestable.\u201d<\/p>\n In April, the CMA said immediate legislation was needed to end the dominance of the Big Four, KPMG, EY, Deloitte and PwC, in order to avoid a repeat of such scandals as the demise of Carillion.<\/p>\nStuttering programme<\/strong><\/h3>\n
\u2018Exceptional scale and complexity\u2019<\/strong><\/h3>\n