Behaviour Of Bank Auditors

EDM number 2263 in 2007-08, proposed by Austin Mitchell on 16/10/2008.
Categorised under the topic of Financial institutions.

That this House is concerned to find that the banks which have failed in the US, Britain and the EU all had clean bills of health from auditors who are dependent for their appointment and fees on companies and their directors; notes that in all these cases auditors also acted as consultants to the companies and reported on the transactions they created, resulting in a financial dependency which inhibited auditors from doing effective audits or drawing public attention to the questionable mixture of toxic debts, off balance sheet accounting, and dubious asset values which brought the banks down; points out that in 2007 PriceWaterhouseCoopers charged Northern Rock £2.4 million (2006: £1.8 million) of which £1 million (2006: £1 million) was for consultancy, KPMG charged Bradford and Bingley £1.4 million (2006: £1.7 million) of which £0.8 million (2006: £0.8 million) was for consultancy, KPMG charged HBOS £11.4 million (2006: £11.2 million) of which £3.4 million (2006: £4.4 million) was for consultancy, Deloitte and Touche charged RBS £31.4 million (2006: £23 million) of which £14.2 million (2006: £11.1 million) was for consultancy and PriceWaterhouseCoopers charged Lloyds TSB £14.6 million (2006: £17 million) of which £1.5 million (2006: £2 million) was for consultancy; and therefore suggests that audits of banks should be directly conducted by the regulators on a real time basis and external auditors of banks must not act as consultants to the banks or the directors.

This motion has been signed by a total of 30 MPs.