KPMG has been fined a record £21 million (€24.3 million) by the UK accounting regulator for serious failings in its auditing of Carillion, the government contractor whose collapse in 2018 sparked political controversy and calls for an overhaul of the audit sector.

The fine, which is the largest ever imposed on an audit firm by the Financial Reporting Council, was reduced from £30 million to reflect KPMG’s co-operation with the five-and-a-half year investigation.

The Big Four firm was ordered to pay £5.3 million in costs to the regulator and two of its former partners were fined £350,000 and £70,000 respectively.

KPMG’s UK chief executive Jon Holt said on the findings were “damning” and that he “simply cannot defend the work that we did on Carillion”. – Copyright The Financial Times Limited 2023