UK watchdog investigates MHA's ISG audit over collapse

The UK's accounting watchdog is investigating the firm MHA for its audit of ISG, a construction group that recently collapsed. This inquiry is a challenge for MHA, which plans to raise £125 million through a stock market listing in London. The Financial Reporting Council (FRC) announced the investigation on Tuesday, focusing on MHA’s audit for the year ending December 2022. ISG’s collapse has put several prison construction projects at risk, affecting at least 27 initiatives. MHA's plans to go public come as the firm seeks to stand out in an industry mostly filled with traditional partnerships. Many other UK accountancy firms are opting for private equity to seek investments. The failure of ISG is one of the most notable in the construction industry since the collapse of Carillion in 2018. This incident renewed discussions about improving audit quality in the UK. MHA stated that it is dedicated to maintaining audit quality and will fully cooperate with the FRC during the investigation.