U.K. government liquidators are preparing to sue KPMG for £250 million (U.S. $306 million) over alleged negligence in its audits of Carillion, the outsourcing group that collapsed in 2018 with debts of more than £1.3 billion (U.S. $1.6 billion).

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Neil Hodge is a freelance business journalist and photographer based in Nottingham, United Kingdom. He writes on insurance and risk management, corporate governance, internal audit, compliance, and legal...