FA was a British multinational created in July 1999, following a demerger from Tarmac. The company was listed on the London Stock Exchange, and in 2016 had 43,000 employees. The company experienced financial difficulties in 2017. In September 2017 Keith Cochrane the Chief Executive Officer told ‘investors that the business had accepted too many projects which turned out unprofitable and for which the amount paid was insufficient for the cost of work done. The Financial Times later reported FA had just £29m in cash when it collapsed, and would have run out of cash by 18 January 2018.

The Big4 firms (KPMG, EY, PwC and Deloitte) were engaged in providing consulting services for FA.. However, immediately, after the collapse of FA (compulsory liquidation) on January 2018, the most drastic procedure inUK insolvency law, with liabilities of almost £7 billion.

The collapse of FA led to UK parliamentary inquiries about the conduct of the firm's directors, its auditors and many other agencies. For example, the Business, Work, and Pensions Select Committees wrote to the 'Big 4' firms, KPMG, EY, PwC and Deloitte, asking for detailed accounts of services offered (auditing services, assurance and consulting services) to FA, its subsidiaries and pension scheme since 2008, and what fees were received.

During the parliamentary inquiries at 30 January 2018 hearing, Frank Field asked the Financial Reporting Council (FRC) head Stephen Hadrill whether the 'Big 4' should be broken up in the wake of FA's collapse. The ethical and professional conduct of the Big4 were in disrepute as they were evidence to show that they were part of FA Plc business process from 2008 to its collapse. The auditing firms were more interested about their fees and revenue from FA. On 13 February 2018, the 'Big 4' were described by Field as "feasting on what was soon to become a carcass" after collecting fees of £72m for FA work during the years leading up to its collapse.

It later emerged that FA paid £6.4m to 12 firms of advisers the day before pleading for an emergency £10m loan from the UK Government; £2.5m was paid to Ernst and Young, with other large payments to Slaughter and May (£1.2m), FTI Consulting (£1m) and Lazard and Co (£0.5m). In January 2019, KPMG announced it had suspended the partner that led FA's audit and three members of his team, and the FRC opened a second investigation into how KPMG audited FA's accounts. After redundant staff of FA made claimed that PwC did not provide information necessary for them to claim redundancy pay and statutory notice pay, causing financial hardship and threatening their mortgage’s payment.

1. List six qualities or skills that auditors from the Big 4' firms, (KPMG, EY, PwC and Deloitte) should have before accepting the task.

2. Prepare a list of internal control framework that FA should have implemented.

3. How can Big 4' firms, maintain a high Ethical and Professionalism in their duties.

4. Do you agree that the auditing and other consulting firms engaged to provide service to FA Plc should have disclosed the company financial position to other stakeholders for example FRC? Defend your answer.

5. When is it appropriate to issue Emphasis- of- Matter in auditing and under what circumstances is emphasis of matter necessary.