In an effort to uncover the actual financial state of six beleaguered banks in Bangladesh, renowned global audit firms Ernst & Young and KPMG have commenced their investigations.
However, KPMG's involvement has raised eyebrows due to its controversial history of flawed audits and significant fines in recent years.
A recent report in the London-based The Guardian highlights KPMG’s ongoing troubles, including multiple fines for erroneous audits.
UK's Financial Reporting Council (FRC) is currently investigating the firm for its handling of financial reports for the British gambling company Entain.
The FRC has cited potential inaccuracies in KPMG’s 2022 audit, leading to the investigation.
Furthermore, KPMG has been penalised with fines amounting to £21 million for biased and erroneous reporting over the past few years.
The FRC stated that its enforcement division is scrutinising the operations of the four major accounting firms, though it refrained from specifying the reasons for the probe.
A KPMG spokesperson confirmed the firm’s full cooperation with the investigation.
The audit of Entain’s financials, under scrutiny, remains uncommented upon by the company itself.
The incident poses a significant setback for KPMG, which has been striving to restore its reputation since the fallout from the collapse of Carillion in 2018, a public services provider also audited by KPMG.
Amid these circumstances, KPMG has been enlisted to audit the actual financial status of Bangladesh’s crisis-hit banks.
Concerns have been raised about the potential effectiveness and impartiality of the audit, given KPMG’s troubled track record.
An official from Bangladesh Bank, speaking anonymously, stated that the audit, funded by the Asian Development Bank (ADB), aims to ascertain the real financial condition of the banks weakened by irregularities and corruption.
The ADB selected Ernst & Young and KPMG for this task, with Bangladesh Bank having no role in the appointment.
The six banks undergoing audit are First Security Islami Bank, EXIM Bank, Global Islami Bank, Social Islami Bank, ICB Islamic Bank, and Union Bank.
The auditing process has already commenced at these institutions, though doubts linger over the reliability of the findings under KPMG’s stewardship.
