The Bank of England’s (BoE) Prudential Regulation Authority (PRA) has reportedly probed the strength of KPMG’s UK business following a succession of corporate scandals.
The PRA, which is responsible for the regulation and supervision of banks, building societies, credit unions, insurers, and investment firms, was reported to have approached other regulators and financial institutions to see whether there are risks to KPMG’s capability.
KPMG is the auditor for a number of organisations which are under the supervision of the PRA and has also been the BoE’s auditor since 2008.
Three people who are said to be involved in the discussion told The Financial Times that the PRA had sought assurance on whether KPMG’s existing clients were planning to cease using KPMG’s services and if the firm was struggling to gain new business following the high-profile criticism of its work for Carillion and its work in South Africa.
Despite these reports the PRA said in a statement: “The PRA is not in discussion about the viability of any audit firm.”
KPMG UK chairman and partner issued a statement this morning: “KPMG is in robust financial health. KPMG is seeing outstanding growth right across our audit, tax and advisory arms, we have a strong balance sheet and are well funded with a growing pipeline.
“The bank of England has a legitimate duty to scrutinise the market. But they have not approached KPMG formally or informally. If they were to, we would be happy to reassure them of our robust financial health.”
International Accounting Bulletin contacted the UK’s Financial Reporting Council to see if the PRA had contacted them on this matter. At the time of publication the FRC had not offered on response.