KPMG ‘s Defensive Attack in the latest Audit Landscape
It is notably easier that Britain’s biggest companies have been changing audit contracts much faster than expected. Nevertheless for KPMG, it managed to hang on its big client; Standard Chartered.
Until the Competition Commission and FRC made a publication of their individual proposal to have more frequent tendering enforced of the 350 FTSE audits, attention has mainly been concentrated on how these top companies will aim at attracting the lucrative contracts at offer. Having retained its Standard Chartered audit that KPMG held for more than 40 years-a piece of work was maintained by the Big four firms which earned it close to £9m as per last year.
The achievement is noted even as the upcoming market focused bank is among the first 100 business FTSE to have its current auditors retained after a competitive tendering process in the new regulatory arena. Previously, PWC had held the Schroders audit and it is only after KPMG walked away from this latest contract after winning the tender and realizing it could not take up on the job due to conflict of interest.
In the past one year, Marks & Spencer, Hscb, Hargreaves Lansdown, FTSE 250 groups and Lands Securities, BG Group and Cairn Energy have all changed their audit firms as a new landscape issue and good corporate governance expression.
The rules at the UK need only a tendering process is conducted as opposed to applying a switch. Standard Chartered therefore did not have any obligation of replacing KPMG and with Richard Meddings the finance director stepping down, it may not have been the most appropriate time of making the change even if it so wished.
Meanwhile, people will have to wait till the annual report is published in spring to obtain an idea of its thoughts as the bank has issued no statement over this decision. Fascinatingly, the approach taken by Standard Chartered towards the audit and other succeeding discretion to have a statement issued in the process was contrasting that of the British Land.
Not too long ago, British Land made an announcement that PwC would have Deloitte replaced as their auditors after more than one decade.
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