Big four accountant KPMG has been handed a record fine for serious failings in its auditing of Carillion.

UK accounting watchdog imposed a total £30m penalty –  reduced by 30% to around £21m after co-operation and admissions were taken into account.

Elizabeth Barrett, Executive Counsel of the Financial Reporting Council said: “The number, range, and seriousness of the deficiencies in the audits of Carillion during the period leading up to its failure was exceptional and undermined the credibility and the public trust in audit.

“This is reflected in the financial sanction imposed on KPMG, the highest ever imposed by the FRC.

“Many of the breaches involve failing to adhere to the most basic and fundamental audit concepts such as to act with professional scepticism and to obtain sufficient appropriate audit evidence.

“The breaches in relation to the 2016 audit even include failing to ensure that the audit process itself was properly managed and that the audit file was a reliable record. These requirements lie at the heart of proper auditing.”

Jon Holt, chief executive and senior partner of KPMG in the UK, described the FRC’s findings as “damning” and apologised for the firm’s failings.

He said: “It is clear to me that our audit work on Carillion was very bad, over an extended period. In many areas, some of our former partners and employees simply didn’t do their job properly. Junior colleagues were badly let down by those who should have set them a clear example, and I am upset and angry that this happened at our firm.”