ANDREW TYRIE, the chairman of the Treasury Select Committee and the last Parliamentary Commission on Banking Standards (PCBS), has once again urged the FRC to investigate KPMG’s work as HBOS auditors.
The MP wants Stephen Haddrill, the accounting and audit watchdog’s chief executive to reconsider the case for a probe into the Big Four firm’s auditing of HBOS – from its inception in 2001 until 2008.
In a statement Tyrie said: “In the course of the investigation (into HBOS) by the regulators the FRC was invited, but turned down, the opportunity to launch an investigation into HBOS’s auditor.
“That was a serious mistake. It is now essential, in the interests of public confidence, that the FRC get on with this investigation, and without delay.
In a letter to the FRC, which was shared with the press, Tyrie said the FRC should take action in a bid to “maintain its public and professional credibility”.
The watchdog, which has already stressed that it lacked sufficient grounds to suspect the auditor of misconduct, said it was in receipt of Tyrie’s letter, had noted its contents but had no further comment to make.
The FCA and PRA report, which covers the years between 2004 and 2008, found that HBOS had “kept its auditors under pressure” in an attempt to keep the provisions for bad loans down and tried to defend impairment figures which were later increased to levels that KPMG viewed as “just within the acceptable range”.
The 500-page tome, which took over three years and £7m to compile, revealed that the bank’s management took an upbeat and optimistic view of the funds it had set aside to cover possible bad loans, a scenario flagged up on several occasions by KPMG.
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