Lonodon, November 30, 2017
Britain’s accounting watchdog said on Thursday it should have been faster to investigate why KPMG gave HBOS’s accounts the green light just seven months before the bank had to be rescued by Lloyds (LLOY.L) during the global financial crisis.
The Financial Reporting Council (FRC) said in September it was closing its investigation into the audit, saying it had found that KPMG’s work for HBOS “did not fall significantly short of the standards reasonably to be expected”.
But on Thursday the FRC called on parliament to make it easier to bring cases against accountants wherever they work. It also promised to be more open about its work after it was accused of being too weak and opaque.
“We should have adopted a more proactive approach to our early enquiry in relation to HBOS rather than a heavy reliance on other regulators,” FRC Chief Executive Stephen Haddrill said in a letter to Nicky Morgan, chair of parliament’s Treasury Select Committee.
KPMG said on Thursday it has maintained that its work met the applicable audit standards of the time, and that it had considered the risks facing HBOS.
Morgan said the FRC would be called before the committee in the New Year to discuss whether its conclusions went far enough.