Not long ago, I wrote a piece on this blog expressing concerns that with our blame culture inevtiably becoming more evident during times of recession, it would only be a matter of time before the auditors of the failed banks fell under the spotlight.
And so they have. After Sir James Crosby, HBOS' former chief executive, dramatically resigned this morning from the FSA, the FSA brought the role of KPMG into the debate, stating that allegations made by HBOS's former head of risk Paul Moore in December 2004 regarding the regulatory risk function at HBOS 'were fully investigated by KPMG, which concluded that the changes made by HBOS were appropriate'.
Comments like that will presumably be music to the ears of potential plaintiffs ... and perhaps one or two lawyers as well. Partners in Big 4 firms will probably be taking a slightly different view.
This one is going to run and run. But it highlights a number of issues: regulation; choice in the audit market place; more competition etc etc. You've heard them all before. One topic, though, requires immediate attention. What is the role of the auditor? The perception of the potential plaintiff would appear to be very different from that of the auditor. Some real clarity in this area would help all concerned.
James Mendelssohn (jmendelssohn@msiglobal.org)
Posted by: |