KPMG retains Standard Chartered audit
27 Jan 2014
27 Jan 2014
Standard Chartered Bank has announced that it is to retain KPMG as its external auditors following an open tender which was widely expected to usher in a change after the firm's forty-plus years' tenure.
In a statement, the bank said it had disclosed its intention in its 2012 annual report to undertake a tendering process during 2013 for the group's statutory audit work, 'in line with the UK Financial Reporting Council's recommendations'.
Standard Chartered and KPMG faced sustained criticism in 2012 from shareholder governance group Pirc which claimed that use of international accounting rules (IFRS) had allowed Standard Chartered to overstate its financial position in its 2011 accounts by $3.6bn (£2.2bn).
In today's announcement, Standard Chartered said the bank's audit committee had recommended KPMG should remain the group statutory auditor 'following an open and thorough tendering process'. The board has ratified the decision, which will now go forward to the bank's 2014 AGM, to be held in May.
Standard Chartered said: 'It should be noted that in making a final decision, there needed to be certainty that the group would secure a material benefit from a fresh approach in order to justify the significant challenges presented by transition to a new auditor.'
According to the 2012 annual report, KPMG was paid $3.8m (£2.3m) for the group audit and a further $10.7m (£6.5m) for auditing Standard Chartered subsidiaries, as well as an additional $4.2m (£2.5m) for non-audit services.
Simon Collins, UK Chairman of KPMG, said: 'Our global KPMG audit team was put through their paces during the rigorous tender process and, while the firm has a long-standing relationship with Standard Chartered, we took nothing for granted. The tender process gave the Standard Chartered Audit Committee the opportunity to take a cold look at the rigour of our audit and we are delighted that the quality of that work has been recognised, resulting in a successful bid.'