Question to the Department for Business and Trade:

To ask His Majesty's Government, further to the Written Answers by Baroness Jones of Whitchurchon 10 March (HL5234 and HL5235), whether they have taken account of the fact that the House of Commons Business, Energy, and Industrial Strategy Committee's report The Future of Audit, published on 26 March 2019, concluded that international accounting standards were defective compared to the requirements of company law.

Answered by Baroness Jones of Whitchurch - Baroness in Waiting (HM Household) (Whip)

The Government announced in the King's Speech its intention to publish a draft Audit Reform and Corporate Governance Bill that will transition the FRC to a new Audit, Reporting and Governance Authority and provide it with relevant powers. The Government will consider the recommendations of the report, including relating to the Government and FRC producing definitions and guidance on what constitutes distributable profits, as work progresses.

Question to the Department for Business and Trade:

To ask His Majesty's Government, further to the Written Answer by Baroness Jones of Whitchurch on 10 March (HL5234), whether complying with accounting standards rather than the law was invoked by KPMG when the Insolvency Service sought £1.3 billion from KPMG in connection with its audits of Carillion plc and its subsidiary companies.

Answered by Baroness Jones of Whitchurch - Baroness in Waiting (HM Household) (Whip)

The Official Receiver on behalf of Carillion Plc and another issued a negligence claim against KPMG, the company's auditors, in November 2021. The area of law on which the claim was based was negligence. The negligence action and compliance with accounting standards are closely connected and the defence to the action relates to both. The defence itself is held on the court file which can be inspected with the consent of the court.

Question to the Department for Business and Trade:

To ask His Majesty's Government, further to the Written Answer by Baroness Jones of Whitchurch on 10 March (HL5234), whether they have considered whether the Financial Reporting Council guidance would have caused the threshold for applying the going concern basis of accounting in the cases of Carillion and its subsidiary companies to be regarded as high even where these were insolvent.

Answered by Baroness Jones of Whitchurch - Baroness in Waiting (HM Household) (Whip)

Guidance issued by the Financial Reporting Council does not change any legal requirement. The issuance and/or application of this guidance would not therefore have caused a change in the going concern basis of accounting assessment.

Question to the Department for Business and Trade:

To ask His Majesty's Government, further to the Written Answers by Baroness Jones of Whitchurch on 10 March (HL5235), why the guidance was not developed to address matters relating to distributable profits given that, under part 23 of the Companies Act 2006, annual accounts are the relevant accounts for determining whether a distribution is lawful.

Answered by Baroness Jones of Whitchurch - Baroness in Waiting (HM Household) (Whip)

The guidance referred to in HL5235 is the FRC's Guidance on the Going Concern Basis of Accounting and Related Reporting (including Solvency and Liquidity risks). This guidance was developed to support companies in completing their 'going concern statement' and not to address matters relating to distributable profits. The Institute of Chartered Accountants England and Wales (ICAEW) currently prepares guidance on how companies should calculate their distributable reserves.

Found: LORD DE CLIFFORD BARONESS BOWLES OF BERKHAMSTED _ Schedule 1, page 187, line 4, at end insert— “New

Found: LORD DE CLIFFORD BARONESS BOWLES OF BERKHAMSTED _ Schedule 1, page 187, line 4, at end insert— “New

Found: LORD DE CLIFFORD BARONESS BOWLES OF BERKHAMSTED _ Schedule 1, page 187, line 4, at end insert— “New

Found: LORD DE CLIFFORD BARONESS BOWLES OF BERKHAMSTED _ Schedule 1, page 187, line 4, at end insert— “New

Found: LORD DE CLIFFORD BARONESS BOWLES OF BERKHAMSTED _ Schedule 1, page 187, line 4, at end insert— “New

Found: LORD DE CLIFFORD BARONESS BOWLES OF BERKHAMSTED _ Schedule 1, page 187, line 4, at end insert— “New

Found: LORD DE CLIFFORD BARONESS BOWLES OF BERKHAMSTED _ Schedule 1, page 187, line 4, at end insert— “New