KPMG to cut down building society audits

Big Four accountancy firm KPMG is to cut down its auditing of Britain’s building societies.

According to Sky News, KPMG is looking to make the move in order to reduce its services to a sector whose audits have seen a series of fines imposed on the firm. KPMG is said to be relinquishing audit work for around 12 mutuals in the sector and a number of small banks.

A source said the firm wanted to cut its audit market share in half to approximately 30%. It is also believed that some of the contracts were reaching a mandatory conclusion after 20 years of service.

However, the mounting pressure placed on auditors has said to have led to executives at the firm deciding to resign audit work for about half a dozen smaller mutuals due to the rising costs of compliance and potential reputational risks.

KPMG declined to comment on the reports.

Earlier this year the FRC fined KPMG £5m over a 2009 audit of the Co-operative Bank. The FRC imposed sanctions against KPMG and its audit partner Andrew Walker, who was fined £125,000, following an “admission of misconduct” in relation to the audit of financial statements.