Last September, the Consumer Financial Protection Bureau (CFPB) fined Wells Fargo $100m (£77m) for opening more than two million deposit and credit card accounts that may not have been authorised by consumers. The agency said employees did so in order to hit sales targets and receive bonuses.

The bank also had to pay an additional $35m penalty to the Office of the Comptroller of the Currency, and another $50m to the city and county of Los Angeles.

Now Democrat senators Elizabeth Warren and Edward Markey have written to the PCAOB asking if the regulator has conducted any review of KPMG's conclusions about Wells Fargo's financial reporting from 2011-2015, the period when the illegal account opening occurred.

They raise the point that KPMG did not publicly report the widespread fraud, despite now acknowledging that its auditors were aware of it prior to the 2016 settlement, and ask whether PCAOB rules or guidance indicate whether auditors have a responsibility to publicly report or otherwise act on their knowledge of illegal or inappropriate activity by their clients.

The letter states: ‘In the case of Wells Fargo, KPMG indicated that the size of the fraudulent accounts or the fines imposed by the CFPB and other regulators for the fraudulent accounts was the sole factor affecting the integrity of financial reporting.

‘KPMG ignored factors such as the impact of the fraud on the company's stock price, the reputational harm to the firm, and the flawed corporate structure that the independent board members identified as a root cause of the scandal. Were these decisions by KPMG appropriate and consistent with PCAOB rules and guidance?’

The letter also makes clear that Warren and Markey, along with two other senators, originally wrote to KPMG last October about the matter.

That letter to KPMG asked for ‘an explanation of how, in its role as independent auditor of Wells Fargo's financial statements from 2011-2015, KPMG failed to identify fraud and mismanagement that affected millions of customer accounts, cost the company billions of dollars in market capitalization, and resulted in the dismissal of over 5,000 Wells Fargo employees and the retirement of the Wells Fargo CEO’

The senators say they got a response from the firm explaining that Wells Fargo's ‘misconduct ... did not implicate any key control over financial reporting and the amounts reportedly involved did not significantly impact the bank's financial statements .... KPMG is confident that its audits and reviews of Wells Fargo's consolidated financial statements were appropriately planned and performed in accordance with applicable professional standards.’

However, Warren and Markey now claim that KPMG's conclusions about the integrity of its financial reporting ‘appear to conflict with the conclusion of a review conducted by Wells Fargo's independent board members’, released in, April 2017. This found that one root cause of the scandal was the bank's basic corporate structure and the top executives responsible for it.

The senators suggest ‘the KPMG response indicates that the auditor still continues to believe that the illegal sales practices were irrelevant to their charge of identifying problems with financial reporting,’ and is asking for the PCAOB to provide answers to their questions about this and a briefing by the end of May.

In a statement the PCAOB said: ‘We appreciate the senators’ continued interest in the important investor protection mission of the PCAOB’s oversight of auditors of public companies. We look forward to reviewing and responding to their letter.’

KPMG said in a statement: ‘As referenced in our response to the senators’ October letter, KPMG takes very seriously its role as independent auditor, and we are confident that our audits and reviews were appropriately planned and performed in accordance with applicable professional standards. Beyond that, our response letter stands on its own, and we have nothing further to add.’

Senators Warren and Markey’s letter to the PCAOB is here.

The senators October letter to KPMG is here.

KPMG’s response is here.