In the latest audit and governance news, MPs slate Kids Company governance and poor financial management, FRC under growing pressure to take action over KPMG-HBOS audit scenario, Stagecoach flips auditors with hiring of EY and materiality reporting ramins sub standard
FRC under pressure over KPMG-HBOS audit
The Financial Reporting Council (FRC) has come under pressure from the Treasury select committee over its handling of investigations into KPMG’s audit of HBOS, which MPs say is ‘long overdue’.
The committee’s chair Andrew Tyrie has written to Stephen Haddrill, FRC CEO, outlining a number of concerns about the process by which the regulator has reached the decision to investigate HBOS and the approach it plans for its preliminary inquiries.
Last month, the FRC said it was undertaking preliminary enquiries under its disciplinary scheme which would focus on two issues relating to KPMG’s auditing.
These are the extent to which the firm considered the appropriateness of management’s use of the going concern assumption in the preparation of the financial statements for the year ended 31 December 2007, and the extent to which KPMG considered whether there were material uncertainties about the bank’s ability to continue as a going concern, that HBOS needed to disclose in the financial statements.
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