Accountancy giant KPMG in the UK is under scanner over the audit work that gave HBOS, banking and insurance company, ‘a clean chit’ in the run-up to its collapse.
London: Accountancy giant KPMG in the UK is under scanner over the audit work that gave HBOS, banking and insurance company, ‘a clean chit’ in the run-up to its collapse.
The Financial Reporting Council (FRC) confirmed it would consider launching an investigation of KPMG's role following last week's damning Parliamentary Commission report on HBOS.
The move will come once the Financial Conduct Authority (FCA) presents its findings on the bank's failure in the autumn, the Daily Star reports.
It comes as a further blow to KPMG after it was forced to quit as auditor of two US firms, nutritional products group Herbalife and footwear maker Skechers amid an FBI investigation into alleged insider trading involving a former employee.
KPMG, which audited HBOS’ accounts throughout the years leading up to the financial crisis, said they stood by the quality of their audit work at HBOS.
Lloyds Banking Group, which rescued HBOS at the height of the banking meltdown, is also reportedly considering legal action against KPMG for failing to spot the black hole in its accounts.
The Parliamentary Commission on Banking Standards said last week that a combined total of 28 billion pounds had been invested into HBOS by the taxpayer and Lloyds.
HBOS was brought to its knees by reckless lending and billions of pounds of bad debts, but KMPG signed off its accounts in 2008, the report added.