A team of lawyers and forensic accountants from the watchdog is investigating KPMG’s audit of Carillion from 2014–2017 as well as two of the firm’s finance directors Richard Adam and Zafar Khan. The main areas of focus for the investigations are: contract accounting; reverse factoring; pensions; goodwill and going concern.

The FRC is reviewing the audit files for the four year period as well as other material relevant to the financial statements and audits of Carillion, including accounting documents produced by the company and emails and other correspondence from the relevant period. The watchdog expects to review tens of thousands of documents and emails in order to establish how and why audit and accounting decisions were reached.

The first of many detailed and recorded interviews and fact-finding meetings with those under investigation and other relevant witnesses have been conducted. Further interviews may be held as the responses of one interviewee often needs to be considered and analysed prior to conducting interviews of others.

In an update today on its Carillion investigations the FRC said: “It frequently takes several months to prepare, schedule and conduct a series of interviews.”

The watchdog added: “FRC investigations are often complex and extensive and any findings may be challenged by experts, lawyers and, if applicable, Tribunal members. This requires detailed and rigorous legal and evidential analysis. The FRC will complete the work relating to Carillion as quickly as possible.

“The speed of the FRC’s investigations may also rely on the level of cooperation of those under investigation, audit clients and third parties (for example: other regulators and liquidators). The Carillion case is one of the largest the FRC has investigated. The FRC will not cut corners to conclude its investigations as that may compromise the integrity of any enforcement action.”