The Bank of England has probed the strength of KPMG’s business after a string of high-profile corporate scandals damaged the reputation of the Big Four accounting firm.
The BoE’s Prudential Regulation Authority, has raised questions with financial institutions and other regulators to see whether there were risks to KPMG’s viability. People involved in the discussions said the PRA had sought assurance on whether KPMG’s existing clients were planning to cut ties with the firm or whether it was struggling to win new business following heavy criticism of its work in South Africa and for British outsourcer Carillion.
The regulator was also keen to understand whether KPMG’s problems in South Africa where it has haemorrhaged clients and cut hundreds of staff over the past 12 months is due to its role in a sprawling government corruption scandal could jeopardise the rest of its international network.
Bill Michael, chairman of KPMG UK, said: “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.”
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