PracticeAuditWho will win Kabul Bank audit?

Who will win Kabul Bank audit?

DfID is spending £7m on a forensic audit of Kabul Bank, and no one knows whether the Big Four or an Afghan firm is the preferred choice

THE DEPARTMENT for International Development has committed £7m to help Afghanistan sort out its floundering financial sector, after Kabul Bank was brought to its knees by an insider loans scandal last year.

It is not yet known which auditor will be handed the contract – the project was only approved yesterday – but it will be interesting to see if a domestic firm is engaged, or whether the Big Four will fill the role.

A DfID spokeswoman suggested an Afghan firm would be preferable due to its knowledge of the local environment and language, Dari. However, Big Four contenders could argue their superior size and international experience make them well placed to get Kabul Bank back on its feet.

Deloitte almost certainly won’t be in the offing as it recently got its fingers burnt, losing a USAID contract to advise the central bank, The Wall Street Journal reported. The contract was suspended after corruption fears caused a run on the bank, and Deloitte was criticised for failing to flag up the possible fraud.

USAID spokesman Lars Anderson said: “We don’t believe that Deloitte can be held responsible for the fraud at Kabul Bank but we do want our technical assistance to be as effective as possible.”

With DfID stumping up the cash, great emphasis will surely be placed on accountability and value for money. Undoubtedly there will be debates about strengthening local capacity via the contract; this could result in it being awarded in its entirety to an Afghan firm, or to a consortium of local firm(s) with international partners. The alternative would be engaging a firm with an existing presence in the country, with obvious contenders being PwC, KPMG and Grant Thornton.

With scant knowledge of Afghan firms’ capacity and experience, it is difficult to say whether they are up to the task of auditing a bank accused of granting off-the-record loans to shareholders and their friends, including the brother of president Hamid Karzai. Millions of pounds in aid have been suspended until donors are satisfied the banking sector has cleaned up its act, and the Kabul Bank audit promises to be interesting and emotive.

Related Articles

Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

4d Emma Smith, Managing Editor
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter
Wetherspoons to replace PwC as auditor

Audit Wetherspoons to replace PwC as auditor

10m Alia Shoaib, Reporter
Audit partner appointed at Grant Thornton in North West

Accounting Firms Audit partner appointed at Grant Thornton in North West

1y Stephanie Wix, Writer
Watchdog launches audit investigation into Sports Direct

Accounting Firms Watchdog launches audit investigation into Sports Direct

1y Stephanie Wix, Writer
Eight landmarks in the history of accountancy

Accounting Standards Eight landmarks in the history of accountancy

2y Acccountancy Age
Friday Afternoon Live: Discussing the aims and intent of Connolly-driven CogitalGroup

Accounting Firms Friday Afternoon Live: Discussing the aims and intent of Connolly-driven CogitalGroup

2y Kevin Reed, Writer