Ref: IMD-7-2038

Case study

Reference: IMD-7-2038

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Carillion: High debt, mismanagement and increased political risk

By Denise H. Kenyon-Rouvinez and Philip Whiteley

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 Accounting, Auditing, Business Strategy, Compliance, Finance, Governance, Mergers and Acquisitions, Outsourcing, Political Risk, Public Sector
Settings Africa, Europe, Middle East, 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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Reference: IMD-7-2038

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Case study

Reference: IMD-7-2038

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