Co-op Bank to change auditor to EY
THE Co-operative Bank is to change its auditor for the first time in 40 years, with EY set to replace KPMG.
The lender, said it had put its external audit work out to tender, and that KPMG – with whom it worked for four decades – had not taken part in the process.
It said it had decided to change auditors for a number of reasons, including its recent separation from its former parent and the probe by the accounting regulator the FRC into the audit following last year’s financial crisis at the Bank.
A statement said: “There were a number of factors which led to the decision to tender.
“These include: the Bank’s separation from the Co-operative Group for whom KPMG remain the auditors; the ongoing FRC investigation into the preparation, approval and audit of the financial statements of Co-operative Bank Plc (the bank) for certain years up to and including the year ended 31 December 2012 and, the board’s intention to adhere to the forthcoming requirement to ensure companies put their audit work out to tender at least once every 10 years.
“The Co-operative Bank would like to thank KPMG for the support they have given the new management team over the last 12 months.”
In its response to the Kelly Review into the near-collapse of the Bank, chief executive Niall Booker said: “We broadly accept the findings of the report which we know will make difficult reading for our customers and will shock those new to the difficulties which the Bank, its employees and customers have faced.”
He added: “On behalf of the Bank I would like to apologise for these past failings”.
The Kelly report prompted a call from John Mann MP, a member of the Treasury Select Committee and member of the co-operative movement for the group to try and to claw back pay from fromer executives.
Between 2008 and 2012 former group CEO Peter Marks earned £8.1m and former CFS boss Neville Richardson £3.7m.
On the issue of clawing back pay, the Bank’s statement added: “The board will consider the implications of today’s report and, bearing in mind the various external investigations into the same past events which are still ongoing, consider what action it should take, after taking appropriate professional advice.”
