The cited record supports the material proposition.
The Financial Reporting Council said in October 2023 that KPMG failed to gather sufficient appropriate audit evidence in its audits of Carillion's 2014 to 2016 financial statements.
- About
- KPMG LLP
- Claim made by
- Financial Reporting Council, regulator statement
- Published
- 12 October 2023
- Evidence score
- 94 How it was scored
- Last reviewed
- 25 October 2026
Why this label
The FRC press notice states the failures in evidence gathering and in professional scepticismS1. The parties received a 30 per cent discount for cooperation and admissions, which brought KPMG LLP's fine from GBP 26.5 million to GBP 18.55 million and KPMG Audit plc's from GBP 3.5 million to GBP 2.45 millionS1. The FRC found the breaches tied to the 2013 transactions were not intentional, dishonest, deliberate or recklessS1. KPMG's chief executive said the firm accepted the conclusions without reservationS5. The findings rest on admissions within a settlement, so they are firm findings of breach, but they do not establish dishonesty by the firm.
Current procedural position
Final settlement decisions with admissions under the FRC Audit Enforcement Procedure, announced on 12 October 2023S1.
Record supporting the assessment
KPMG failed to gather sufficient appropriate audit evidence
failed to conduct its audit work with an adequate degree of professional scepticism.
accept its conclusions and the sanctions that have been imposed without reservation
Conflicting or limiting record
No record located that conflicts with this assessment.
Evidence score: 94 of 100
The score grades how well the record establishes this assessment. It is not a score of KPMG LLP. Score = source authority + directness + corroboration + procedural accuracy + currency + reproducibility.
| Component | Points | Max | Reason |
|---|---|---|---|
| Source authorityIs the source competent to establish the proposition? | 29 | 30 | The FRC is the competent UK audit regulator. |
| DirectnessDoes the source state the proposition or only discuss adjacent facts? | 19 | 20 | The notice states the failures in plain terms. |
| CorroborationDo independent records support the same material point? | 12 | 15 | KPMG's own acceptance agrees with the regulator. |
| Procedural accuracyDoes the record settle the procedural state the claim describes? | 15 | 15 | Final decisions based on admissions. |
| CurrencyHas the record been checked against later developments? | 9 | 10 | No later change to the decisions was found as of October 2026. |
| ReproducibilityCan a reader locate the passage and repeat the assessment? | 10 | 10 | The notice is public on the FRC site. |
| Total | 94 | 100 |
Timeline
- Carillion enters compulsory liquidation
- FRC announces sanctions on KPMG LLP, KPMG Audit plc and two former partnersS1
Related cases
- Executive Counsel to the FRC v. KPMG LLP, KPMG Audit plc and two former partnersFinancial Reporting Council, Audit Enforcement Procedure. Audit. Not published.Stage: Final settlement decisions with admissions.
- Fines of GBP 18.55 million on KPMG LLP and GBP 2.45 million on KPMG Audit plc after a 30 per cent discount, plus investigation costsS1
- Official Receiver as liquidator of Carillion plc v. KPMG LLPHigh Court of England and Wales. Civil. Not published.Stage: Settled on confidential terms in February 2023.
- Confidential settlement of the GBP 1.3 billion negligence claim reportedS4
Responses
- KPMG UK, 12 October 2023: Chief executive Jon Holt called the findings damning and said he was very sorry the failings happened.S5
Revision history
- Assessment first published with label Supported.
Have a record that changes this assessment? See corrections and responses.
Sources
- S1Tier A Sanctions against KPMG LLP, KPMG Audit plc and two former partnersFinancial Reporting Council. Regulator press release. 12 October 2023.Supports the fines, the admitted breaches in the 2013 to 2016 Carillion audits and the finding that some breaches were not dishonest. The full decision documents were not read.Link working, checked 25 October 2026
- S5Tier C KPMG handed record fine over audit failures in Carillion demiseAccountancy Age. Press report. 12 October 2023.Report by Greg Noble quoting KPMG's chief executive. The record fine description is the publisher's.Link working, checked 25 October 2026
- S4Tier C KPMG settles with Carillion liquidator over £1.3bn legal battleConstruction Enquirer. Press report. 20 February 2023.Report by Aaron Morby on the confidential settlement. The date comes from the URL and the amount was not disclosed.Link working, checked 25 October 2026
Other claims about KPMG LLP
- Opinion73A May 2018 joint report of two House of Commons committees said KPMG was complicit in Carillion's aggressive accounting judgements.Official report, 16 May 20183 records citedAccounting
- Supported91A disciplinary tribunal found in July 2022 that KPMG gave false or misleading documents and information to FRC inspectors reviewing its Carillion and Regenersis audits.Regulator statement, 25 July 20222 records citedDisclosure