The FRC has announced it will launch an investigation into the conduct of KPMG’s audit of HBOS for the year ended 31 December 2007. Below is KPMG’s response:
“It has now been eight years since the financial crisis. The FRC, PRA and FCA have already looked at the events that led to the failure of HBOS in exhaustive detail and we have cooperated fully with all inquiries and investigations. We will continue to do this, but trust and ask that the investigation be completed as quickly as possible.
“Throughout it has been our position that our audits of HBOS were performed to the appropriate prevailing standards. We are confident that our work will stand up to objective scrutiny.
“HBOS reported pre-tax profits of £5.5 billion in its 2007 financial statements and continued to raise capital in the wholesale markets well into 2008. Banking analysts continued until August 2008 to expect that it would be profitable in that year. With hindsight, market conditions all changed with the failure of Lehman in September 2008 and the effective closure of the wholesale funding markets.”
Notes to editors:
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.