In our monthly roundup of developments in audit and governance, FRC drops probe into KPMG HBOS audit, FRC hits PwC with record £5.1m fine over collapsed RSM Tenon audit failure, Deloitte resigns as PayPoint auditor as KPMG appointed
FRC drops probe into KPMG HBOS audit
The Financial Reporting Council (FRC) has abruptly closed the investigation into KPMG’s audit of HBOS for the year ended 31 December 2007 after concluding there was no ‘realistic prospect of an adverse finding’.
The Big Four firm’s work did not fall significantly short of the standards reasonably to be expected of the audit, the test that a tribunal would apply, the audit regulator said.
HBOS collapsed in October 2008, when it was subject to a £50bn government bailout, having failed to foresee market conditions deteriorating and had felt it would be able to fund itself. KPMG auditors accepted the bank’s assessment and in Febraury that year published audited statements prepared on a ‘going concern’ basis.
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