FRC to publish HBOS findings in the Spring
Britain’s accounting watchdog aims to publish a full report in coming weeks into how banking group HBOS was audited by KPMG [KPMG.UL] before the lender collapsed in 2008 during the financial crisis.
The Financial Reporting Council (FRC) has come under pressure from parliament to undertake a full, independently supervised investigation into the auditing of HBOS’s accounts.
HBOS, formed through the merger of mortgage lender Halifax and Bank of Scotland, had to be rescued in a government-engineered takeover by Lloyds Banking Group (LLOY.L), which subsequently needed a 20 billion pound taxpayer bailout of its own.
FRC Chief Executive Stephen Haddrill said the body will conduct preliminary enquiries as quickly as possible, but it was important that the findings are robust as they could be tested by an independent tribunal.
“Nonetheless we would hope to be in a position to report our conclusions in the Spring,” Haddrill said in a letter to Andrew Tyrie, chairman of the Treasury Select Committee of legislators, dated Feb. 10 and made public on Tuesday.
The FRC would publish a full report drawn from all its work in relation to HBOS and bank auditing, including the findings from the watchdog’s supervisory inquiry in 2013 into KPMG’s audit of HBOS, Haddrill said.
“The FRC’s decision to publish a report is overdue but welcome,” Tyrie said in a statement. “The Committee will persist with its effort to secure a thorough examination of the role of the auditors.”
The 2013 probe looked at how the bank made provisions to cover losses from loans and found no grounds to take matters further.
KPMG has said a thorough review of the HBOS audit was in the interests of the audit profession, shareholders and society as a whole.
Source: Reuters
