"Given the clear public interest in this matter", the UK's accounting watchdog, the Financial Reporting Council (FRC) has provided an update on its investigation into  Carillion plc. Its decision to do this underscores its recent thematic review and report, covered on Board Talk, that urges audit firms to "do the right thing" and act in the public interest.

This is a new remit for corporate governance in the United Kingdom (and possibly just about anywhere) : 'the public interest' as the idealised focused target for business.

The FRC explains today that the main areas of focus for the investigations of KPMG’s audit of Carillion (2014 – 2017) and of two finance directors Richard Adam and Zafar Khan are: contract accounting; reverse factoring; pensions; goodwill and 'going concern.'

It declares it 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. It expects "to review tens of thousands of documents and emails in order to establish how and why audit and accounting decisions were reached" it adds.

As liquidator of the Carillion companies, the OR (insolvency Service) has access to the bulk of the Carillion material and work is ongoing, said the FRC, to ensure "a lawful and efficient mechanism for sharing relevant material between the regulators." The first of many detailed and recorded interviews and fact-finding meetings with those under investigation and other relevant witnesses have been conducted, the watchdog confirmed yesterday.

Further interviews may be held, it said " as the responses of one interviewee often needs to be considered and analysed prior to conducting interviews of others."

It frequently takes several months to prepare, schedule and conduct a series of interviews and  FRC investigations are often complex and extensive and any findings may always also be challenged by experts, lawyers and, if applicable, Tribunal members. This, it said, means that it requires detailed and rigorous legal and evidential analysis.

Pledging to "complete the work relating to Carillion as quickly as possible", the FRC nevertheless said:  "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 FRC  also reminds us that the #Carillion case is one of the largest it has ever investigated as the regulator in charge of standards in the accounting profession. "The FRC will not cut corners to conclude its investigations as that may compromise the integrity of any enforcement action" it concludes.

NOTE: this was written just as a damning 100-page report was published by two parliamentary select committees. It found that directors prioritised senior executive bonus payouts and dividends for shareholders while treating pension payments as a “waste of money”.

Frank Field MP, who chairs the work and pension committee, said: “Same old story. Same old greed. A board of directors too busy stuffing their mouths with gold to show any concern for the welfare of their workforce or their pensioners.”

There's clearly a lot more to be done to even begin to put 'the public interest' at the forefront of corporate governance in the UK.