UK’s Accountancy Watchdog Launches Investigation Into KPMG’s Audit Of BNY Mellon

The Bank of New York Mellon (BNY) was hit with a record breaking fine of £126m in the United Kingdom after it was established that BNY mixed up its own funds along with client funds. BNY wasn’t the only bank in the UK that was fined as facts emerged that a number of premier banks had breached UK financial laws deliberately.

KPMG was the firm that audited BNY and the UK’s Financial Reporting Council (FRC) has concerns over the auditing process. The UK’s accountancy watchdog has decided to launch an investigation into KPMG’s audit of BNY’S London branch and its subsidiary Bank of New York Mellon International Limited. The investigation will carefully examine the audit process which looked at client money arrangements that BNY has made. KPMG has confirmed that they will offer full co-operation to the FRC and continue to maintain the high standards the company is used to.

BNY Mellon had earlier accepted the fact that they had violated client asset rules from 2007 to 2011 and this admission caused the Financial Services Authority in the United Kingdom to have serious concerns over other banks as well. The FSA and the FRC are also looking into other audit firms to see if they have followed a strict process and have not made any exceptions.

Back in January 2012, PwC’s was fined £1.4m for not conducting a proper audit with JP Morgan. PwC is also currently being investigated by the FSA for the audits it conducted between 2007 and 2011 for Barclays.