Carillion: High debt, mismanagement and increased political risk
Case Study

Carillion: High debt, mismanagement and increased political risk

14 pages
October 2019
Reference: IMD-7-2038

Aggressive accounting hid liabilities, that were missed by auditors; complacent assumptions around the valuation of goodwill were evident. Political risk – The scandal shook the assumption that private sector management was inherently superior, and nationalization gained public support in the UK.

Learning Objective

The case study provides a rare opportunity to explore the dynamics of a board that failed to identify strategic risks, and who missed warning signs, both oblique and explicit.

There are also learning opportunities around the valuation of goodwill, and auditing of complex accounts. Much detail is in the public domain, following a major Parliamentary inquiry.

Keywords
Finance, Governance, Compliance, Business Strategy, Mergers and Acquisitions, Accounting, Auditing, Political Risk, Public Sector, Outsourcing
Settings
Europe, Middle East, Africa, Northern America, United Kingdom
Construction and Engineering
20 years, but with a particular focus on later period 2015-2018
Type
Published Sources
Copyright
© 2019
Language
English
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