MPs have accused the Big Four accountancy firms of “feasting” on Carillion as it headed towards insolvency.
Evidence published today by the joint select committee inquiry into the failure of Carillion shows that since 2008 the City’s accountancy giants have billed Carillion for £71m worth of work.
KPMG, which acted as Carillion’s auditor for 19 years, billed the construction giant £20.2m. Meanwhile, PwC, Deloitte, and Ernst and Young charged a total £21.1m, £12m and £18.3m respectively.
Frank Field, chair of the Work and Pensions Select Committee, said PwC had “managed to play all three sides”. The accountancy firm carried out auditing work for Carillion's subsidiary Alfred McAlpine, advised on pensions, and is now acting as special manager for the government as part of Carillion’s liquidation.
“The image of these companies feasting on what was soon to become a carcass will not be lost on decent citizens,” Field said.
A PwC spokesperson said: “The joint committee’s request for information dates back to 2008 and the majority of the work that PwC undertook directly for Carillion was carried out prior to June 2015 rather than in the last few months before its collapse.
"Our technical skills and ability to deal with complex business problems led to our appointments to work for the government and the pension trustees."
KPMG has come under intense scrutiny from MPs for its audit of Carillion. The committee has taken a particular interest in KPMG’s 2016 audit of the outsourcer; KPMG designated Carillion as a going concern, months before it issued a £845m writedown on a contract and a profit warning.
A KPMG spokesperson said: “We are committed to building public trust in audit.
“We take the questions that have been asked of our profession in recent weeks very seriously and we welcome the opportunity to appear before the joint committee on 22 February and assist the inquiry with their investigations.”
Meanwhile, the government yesterday announced it had saved 4,400 jobs through its redeployment of Carillion workers to alternative contractors.
Source : http://www.cityam.com/280489/big-four-accused-feasting-carillion-mps414