FRC made ‘serious mistake’ by failing to investigate HBOS audit sooner

FRC made ‘serious mistake’ by failing to investigate HBOS audit sooner

The Treasury Select Committee criticises the FRC for a 'lack of curiosity and diligence' in deciding to not investigate KPMG’s audit of HBOS before the publication of a report financial regulators, the FCA and PRA

ACCOUNTING WATCHDOG the FRC made a “serious mistake” by failing to investigate the auditing of HBOS earlier, MPs have said in a report which criticises the way regulators handled the collapse of the bank.

The Treasury Select Committee criticised the FRC for a “lack of curiosity and diligence” in deciding to not investigate KPMG’s audit of HBOS before the publication of a report financial regulators, the FCA and PRA.

The FRC launched a formal investigation into KPMG’s audit of HBOS last month. The investigation will look at the Big Four firm’s audit of HBOS for the year ended 31 December 2007 and will focus on the use of going concern assumptions and whether there material uncertainties about the bank’s ability to continue as a going concern that needed to be disclosed.

“The investigation announced on 27 June 2016 is better late than never. But the very tardy response by the FRC appears to be as inexplicable as it is unacceptable,” the committee said.

“These failures are all the more concerning given the scale of the problems at HBOS, and the clear public interest at stake. It is extraordinarily unhelpful that the FRC has taken so long and has belatedly reconsidered its position, only after considerable pressure from parliament.

Whitepaper

The Future of Finance is in the CFO's Hands

Business The Future of Finance is in the CFO's Hands

1m
Save a Week a Month Consolidating Accounts

Accounting Software Save a Week a Month Consolidating Accounts

2m
Mitigating Risk Through Internal Control

Legal Mitigating Risk Through Internal Control

3m
Could tax season have run more efficiently?

Corporate Tax Could tax season have run more efficiently?

3m

Related Articles

KPMG replaces PwC as Croda auditor

Accounting Firms KPMG replaces PwC as Croda auditor

2y Emma Smith, Managing Editor
FRC closes investigation into PwC over Barclays compliance

Accounting Firms FRC closes investigation into PwC over Barclays compliance

2y Alia Shoaib, Reporter
FRC closes KPMG HBOS audit investigation, Treasury Committee expects ‘full explanation’

Accounting Firms FRC closes KPMG HBOS audit investigation, Treasury Committee expects ‘full explanation’

2y Emma Smith, Managing Editor
PwC to audit BBC pay policies following gender pay gap outrage

Accounting Firms PwC to audit BBC pay policies following gender pay gap outrage

2y Alia Shoaib, Reporter
PwC to take over from Deloitte as Diploma auditor

Accounting Firms PwC to take over from Deloitte as Diploma auditor

2y Alia Shoaib, Reporter
Deloitte rises in auditor rankings with most FTSE 250 clients

Accounting Firms Deloitte rises in auditor rankings with most FTSE 250 clients

2y Alia Shoaib, Reporter
Partner joins BDO from KPMG

Accounting Firms Partner joins BDO from KPMG

2y Alia Shoaib, Reporter
PwC fined $1m over Merrill Lynch audit

Accounting Firms PwC fined $1m over Merrill Lynch audit

2y Alia Shoaib, Reporter