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| Version 1 | Version 2 |
|---|---|
| KPMG is cleared over HBOS audit | KPMG is cleared over HBOS audit |
| (about 4 hours later) | |
| KPMG will not face further scrutiny over its audit of HBOS in 2007. | KPMG will not face further scrutiny over its audit of HBOS in 2007. |
| HBOS had to be rescued in 2008 and KPMG was criticised for giving the bank a clean bill of health. | HBOS had to be rescued in 2008 and KPMG was criticised for giving the bank a clean bill of health. |
| But the Financial Reporting Council (FRC) has closed its investigation into the accountancy firm's conduct and will not take further action. | But the Financial Reporting Council (FRC) has closed its investigation into the accountancy firm's conduct and will not take further action. |
| The FRC concluded it was not "unreasonable" in 2007 for KPMG to have accepted the HBOS view that it was able to continue funding itself. | The FRC concluded it was not "unreasonable" in 2007 for KPMG to have accepted the HBOS view that it was able to continue funding itself. |
| "The firm's work did not fall significantly short of the standards reasonably to be expected of the audit," the FRC said in a statement. | "The firm's work did not fall significantly short of the standards reasonably to be expected of the audit," the FRC said in a statement. |
| It said the financial crisis created "extreme funding conditions" in October 2008 that had not been anticipated. | It said the financial crisis created "extreme funding conditions" in October 2008 that had not been anticipated. |
| The problems at HBOS financial were so severe that the government had to inject more than £20bn into its new owner, Lloyds Banking Group, to shore up its finances. | The problems at HBOS financial were so severe that the government had to inject more than £20bn into its new owner, Lloyds Banking Group, to shore up its finances. |
| Many wondered if KPMG should have spotted signs of that trouble in 2007 and the FRC was heavily criticised for not investigating KMPG's conduct sooner. | Many wondered if KPMG should have spotted signs of that trouble in 2007 and the FRC was heavily criticised for not investigating KMPG's conduct sooner. |
| Last year, Andrew Tyrie, then the chairman of the Treasury Select Committee, said the FRC had made a "serious mistake" in not launching an investigation earlier and accused the regulator of a "lack of curiosity and diligence". | Last year, Andrew Tyrie, then the chairman of the Treasury Select Committee, said the FRC had made a "serious mistake" in not launching an investigation earlier and accused the regulator of a "lack of curiosity and diligence". |
| The current chair of the Treasury Committee, Nick Morgan wants a "full explanation" from the FRC of its decision not to take further action against KPMG. |