An article published today by The Times in which KPMG U.K. Chairman Bill Michael defended the firm’s audit of Carillion is getting some reaction on Twitter—good for the newspaper, bad for Michael and KPMG.
The article states:
The chairman of KPMG has hit back at MPs in charge of the inquiry into the collapse of Carillion who called the firm’s audit of the outsourcing group “complacent”.
Bill Michael, who took over running KPMG in September, months before Carillion went into liquidation, said the accusation “does not reflect the hard work and commitment of the Carillion audit team”. He said he “respectfully disagreed” with the MPs’ criticism and defended KPMG’s role as auditor.
KPMG was paid £29 million to audit Carillion for 19 years. The Big Four firm was accused by Rachel Reeves and Frank Field, who chaired the parliamentary inquiry, of “complacently signing off the directors’ increasingly fantastical figures” and of “failing to exercise professional scepticism” towards the accounts.
Carillion, which constructed and managed government projects, had contracts covering projects including hospitals and high-speed rail, but collapsed after failing in last-ditch efforts to get support from lenders and the government, according to a Bloomberg report.
Michael’s comments prompted an outcry from some on Twitter, including Reeves, who said his defense of the Carillion audit does not reflect well on KPMG:
It doesn’t reflect well on KPMG to suggest all went well with their Carillion audit. Time for some soul searching to restore integrity of audit and company accounts.https://t.co/kUrqCOHmgO
— Rachel Reeves (@RachelReevesMP) July 12, 2018
KPMG chairman defends audit of Carillion.
Just confirms what is wrong with the lenses of the big firms. What has to happen for these people to recognize that their product is faulty, does not deliver and meet people's or regulator's concerns.https://t.co/DemAREyIQi
— Prem Sikka (@premnsikka) July 12, 2018
KPMG Chairman says he “respectfully disagrees” with conclusion that his firm acted complacently in auditing Carillion. Thousands of jobs put at risk, public services mismanaged, new hospitals unfinished.
I’d respectfully suggest most people will find his comments complacent. pic.twitter.com/uYD11YU4WI
— Bill Esterson (@Bill_Esterson) July 12, 2018
What beggars belief is the fact that Carillion has the same external auditors for 19 years. Appalling standard of governance. https://t.co/tz1aTLvc3N
— Steve Scown (@SScown) July 12, 2018
We’ll continue to update this article.
Image: Shutterstock/Isabelle OHara