At a testy hearing of the work and pensions and business joint select committee, the reputations of audit partners at the two international accountancy firms were shredded as incredulous MPs wondered why they had not dug deeper when alarm bells seemed to be ringing around the construction contractor.

MPs heard evidence from Michelle Hinchliffe, head of audit at KPMG, Peter Meehan, the KPMG partner who audited Carillion, and Michael Jones, who led Deloitte’s internal audit service at the contractor. KPMG was paid £29 million over 19 years by Carillion, and Deloitte £11 million over an unknown period. Rachel Reeves, co-chairwoman of the committee, said: “These audits appear to be a colossal waste of time and money, fit only to provide false assurance to investors, workers and the public.”

Ms Reeves criticised Mr Meehan and Mr Jones after their respective admissions that Mr Meehan had failed to visit at-risk Carillion projects and Deloitte had missed quarterly meetings with the Carillion board’s audit committee.

“Carillion staff and investors could see the problems at the company but those responsible — auditors, regulators, and, ultimately, the directors — did nothing to stop Carillion being driven off a cliff,” she said.

Mr Meehan told MPs that for the 2014 and 2015 audits he had visited the construction project in Qatar that the former chief executive Richard Howson blamed for Carillion’s collapse. Mr Meehan did not make any subsequent visits despite knowing of the importance of the contract. Carillion claimed that it was left with £200 million of unpaid bills in Qatar. Mr Meehan repeatedly stated that despite Mr Howson’s assertions, the Qatar contract had only become a serious issue in the months after the 2016 accounts were signed off in March last year and leading up to the major profit warning of last July, which laid bare the crisis at Carillion. The auditor conceded that Qatar had been flagged as an “amber warning” at a meeting in the February before the sign-off of those accounts.

On another contract, the £350 million construction of the Royal Liverpool Hospital, Mr Meehan admitted that although he had been on previous fact-finding site visits, he had not returned despite internal revelations of major on-site issues in November 2016. He finally made a visit to the hospital last month, four days before Carillion went bust. He contested claims that Carillion’s accounting had become aggressive but said that he had told Carillion board directors that their accounting on some of the “riskier contracts” had become “optimistic”. His concerns were overruled. Despite this, he said he remained happy to sign off the accounts.

Mr Meehan said he had become aware of the enormity of the issues in Qatar in May last year, at which point “we knew a writedown was coming”.

That writedown and those on Royal Liverpool, the Midland Metropolitan in Birmingham and the £700 million Aberdeen bypass were taken on July 10, at which point Mr Howson was removed from his post. Mr Meehan said a review of contracts at that point found that in previous internal reviews, managers had been more pessimistic about the likely outcome for the contracts than the position that was reported.