But Andrew Tyrie, chairman of the Treasury select committee, said: “It is now essential – in the interests of public confidence – that the FRC get on with this investigation, and without delay.”
The Conservative MP is making his plea for the FRC to reconsider its decision as the committee of MPs prepares to hold hearings with a number of key individuals involved in the report, which cost £7m to produce and was published in November, two years later than planned.
The committee is taking evidence from Andrew Green, the QC who scrutinised the decision by City regulators only to take action against one former HBOS executive. Green concluded it was in the public interest for regulators to widen their investigation beyond Peter Cummings, who was banned and fined £500,000 in 2012.
The regulator at the time was the Financial Services Authority, which has since had its responsibilities split between the Financial Conduct Authority and the Bank of England’s Prudential Regulatory Authority. Both of those bodies are sending representatives to the select committee this week, including Andrew Bailey, boss of the PRA and deputy governor of the Bank of England.
“In the course of the investigation by the regulators, the FRC was invited, but turned down, the opportunity to launch an investigation into HBOS’s auditor. That was a serious mistake. Given the findings of the full report, the accompanying report by Andrew Green QC into enforcement and the report of parliament’s specialist advisers, confidence in the audit process will have taken a knock,” said Tyrie.
KPMG audited the bank from when it was created in 2001, through the merger of Bank of Scotland and Halifax, to when it was taken over by Lloyds Banking Group in 2008.
On the day the report was published, the FRC said it reviewed the audits of bad debt provisions:“Based on the findings from this review of the relevant audit work, the conduct committee of the FRC has concluded that there were not reasonable grounds to suspect there may have been misconduct as defined under the disciplinary scheme for members of the accounting profession.”
It acknowledged the receipt of the letter from Tyrie asking for this decision to be reconsidered. Tyrie has also asked the Institute of Chartered Secretaries and Administrators for advice on the contents of board minutes. The ICSA said: “In light of reports that we have seen of the proceedings before the treasury select committee, ICSA is already working on some updated guidance on the minuting of meetings, and we expect this to be published in the spring.”
This article was written by Jill Treanor, for theguardian.com on Monday 14th December 2015 00.01 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010