The UK's audit watchdog will investigate KPMG for work carried out on behalf of Carillion, the listed construction giant that collapsed this month — while MPs focus on an investigation of the £800m shortfall in the company's pension schemes.

The Financial Reporting Council said in a statement today that its probe would cover audits carried out by KPMG in 2014, 2015 and 2016 and additional work in 2017. It is also looking at the conduct of individual accountants within Carillion.