Barclays ends 120-year relationship with PwC; changes to KPMG
04 July 2015
Barclays has ditched long-term auditor PwC for KPMG, ignoring concerns about the role of the accountancy firm in two recent banking scandals.
The High Street lender, currently led by chief executive Antony Jenkins, had retained PwC as its auditor since 1896.
PwC's competitor KPMG woill take over as Barclays' auditor for the year ending 31 December, 2017.
The move comes after the Competition and Markets Authority manadted that large companies must change their auditors every 10 years.
KPMG audited HBOS during the period while the lender ran up losses which eventually totalled over £25 billion.
According to a parliamentary report on banking standards, KPMG had signed off on the decision by HBOS to set aside only £370 million for covering bad loans.
The company was also auditor of the Co-operative Bank when it ran up losses of over £1.5 billion.
According to The House of Commons Treasury Committee report, KPMG had 'failed to uncover the bank's capital shortfall until it was too late'.
It added that, 'the independent inquiry into events at Co-op Bank should also look closely at the shortcomings of the bank's auditor, KPMG'.
KPMG's history of auditing failed banks had not stopped a number of the firm's senior figures from prospering in the public sector.
Former KPMG boss John Griffith-Jones heads the Financial Conduct Authority, which regulates the UK's finance industry.
PwC was not invited to join the tender process after big companies were told by the UK competition watchdog to change their auditors more frequently to keep accountants on their toes.
While the UK is making listed companies call tenders for their audits every 10 years, the EU required changing them every 20 years.
Audit of the UK's big five banks is lucrative business; Barclays paid its auditors £44 million last year.
However, given the complexity of big banks, the handover of roles from one auditor to another could take two years.