The Purpose of Audits: A Look at Developments in the United Kingdom

The Purpose of Audits: A Look at Developments in the United Kingdom

February 22, 2024

In May 2018, UK multinational outsourcing giant Carillion collapsed with a calamitous loss of jobs, pensions, and investor value, and plunging hundreds of public sector projects into crisis. Its demise focused attention on its auditor, KPMG, who had delivered a series of unqualified audit opinions over nineteen years, “complacently signing off the directors’ increasingly fantastical figures” (UK Parliament Publications). Carillion joined a list of other high-profile UK public company failures, including Thomas Cook, BHS, Patisserie Valerie, Ted Baker, and London Finance and Capital. A decade before Carillion, the auditors of the major UK banks were described in a House of Lords report as a “significant contributory factor” to the banking crisis.

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