Accountants’ watchdog to probe KPMG’s Co-op Bank audit

THE accounting watchdog, The Financial Reporting Council, has launched an investigation into KPMG’s audit of the Co-operative Bank.

A brief statement said: “The Financial Reporting Council (FRC) has launched an investigation under the Accountancy Scheme into the preparation, approval and audit of the financial statements of The Co-operative Bank plc, up to and including the year ended 31 December 2012.”

The FRC probe is the latest to be ordered into the problems which unfolded at the Manchester-based lender in 2013.

Earlier this month the Financial Conduct Authority and the Prudential Regulation Authority said they were examining the matter, while the Co-operative Group has Sir Christopher Kelly investigating the circumstances around the bank’s financial problems, while former City minister Lord Myners is looking at the group’s structure and governance.

In a statement KPMG said: “Given the issues which the bank has experienced in recent months and in the light of the high media profile and public interest associated with these issues, it is understandable that there should be appropriate regulatory scrutiny.

“Reviews by the Treasury Select Committee, the Financial Conduct Authority and the Prudential Regulation Authority  are either underway or have been announced, and it is to be expected that this scrutiny should extend to the audit whilst recognising that the auditor is independent of the events which gave rise to the issues experienced by the bank.
 
“As auditor to the bank we believe that we have provided, and continue to provide, robust audits which provide rigorous challenge to the judgements and disclosures proposed by the bank’s management.
 
“We look forward to co-operating fully with the FRC (and other regulatory authorities) in their investigations.”