Carillion entered into liquidation in January 2018 and the Official Receiver (“OR”) was appointed to deal with the liquidation.
The previous audits of Carillion by KPMG have been widely criticized and the OR has issued a £250m claim against KMPG. The OR has obtained funding from a litigation funder.
The OR claims that the forward contracts and goodwill were overvalued in accounts. The claim states that the auditors should have known this a couple of years before the company collapsed. The over valuation of the assets meant that dividends and consultancy fees continued to be paid out of the company after it received a clean bill of health from the auditors. The claim argues that the dividends and management fees would not have been paid out had the audit been conducted properly.
This is another claim highlighting the potential risks on auditors if the business subsequently fails.
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