KPMG fights £1.3bn lawsuit over Carillion audits

The Government is suing KPMG for £1.3bn over allegations it was negligent in its audit of the collapsed contractor Carillion. Ministers have accused the big four accounting firm of failing to respond to "red flags" in Carillion's accounts ahead of its failure. The Official Receiver, the government liquidator, said in a claim filed in the High Court that Carillion’s true financial position "bore no resemblance" to its reported results. Documents filed in the High Court stated: "KPMG signed unqualified audit opinions in relation to the claimants' financial statements and the group's consolidated financial statements for each of the 2014 to 2016. "KPMG thereby reported that in their opinion, having conducted proper audits, those financial statements gave a true and fair view of both the claimants' and the group's state of affairs as at each year-end and the group's and CCL's profit for each year, and has been properly prepared in accordance with the applicable accounting standards, the group's and CCL's accounting policies and the Companies Act 2006."