21 November 2015

Auditors put money before responsibility ………… surely not!

Earlier today, Radio 4's 'Money Box' programme aired a fascinating piece on the part played in the various banking collapses of 2007/8/9 by the various auditors who signed off banks' accounts. KPMG came in for a lot of stick and the suggestion was that KPMG may have buckled to client pressure in giving accounts a rosier gloss than supported by the facts. Unsurprisingly, an HBoS Director, Paul Moore (one time Head of Risk), tried to raise his concerns and was fired for his trouble.

At the same time that self-style City Regulators are about to report on the financial crash, Moore is also about to publish a book which may be a more accurate description of how the bankers behaved.

But none of this surprises me because exactly the same situation existed in Somerton back in 2008/9 when I lodged an objection to Somerton Council's accounts. Having looked through the Council's recordss, it was obvious to me that Somerton's problems had their roots in decisions made by the Council some years previously. But all of those previous year's accounts had been prepared by the Council's accountant and signed off by the Council's auditors. Importantly, when the auditor was examining the Council's accounts for 2008/9, the auditor refused to consider previous years' accounts as they had been signed off (by the auditor themselves) and were therefore closed. How convenient.

Will the same thing happen with KPMG and their colleagues? Probably.