HONG KONG, March 7 HSBC Holdings Plc,
Europe's biggest bank, has started searching for a replacement
for its long-serving auditor, KPMG, after having paid $81
million to the accounting firm in fees last year.
This would be the first time since 1991 that the bank has
put in place a tender process for its external auditors.
Previously, KPMG was re-appointed by the bank's board following
the recommendations of HSBC's risk and audit committees.
A new audit firm, if appointed, will begin its work in 2015,
HSBC said in its annual report.
Fees paid by HSBC to KPMG have fluctuated over the past few
years, peaking at $87 million in 2011, more than three-quarters
of which went to paying for audit services. The rest went to
paying for taxation and compliance-related services.
The bank appointed a new group head of internal audit in
February, with Manveen Pam Kaur replacing Paul Lawrence, who
retired after 31 years at HSBC.
HSBC's decision to consider hiring new auditors comes after
Britain's Competition Commission said many companies are
reluctant to change external auditors because they face
significant costs in switching.
In the study, the commission found that 31 percent of FTSE
100 companies and 20 percent of FTSE 250 companies have had the
same auditor for more than 20 years. It also said it is
considering mandating a compulsory rotation of audit firms.
Most large companies pick one of the "Big Four" accounting
firms - Ernst & Young, PricewaterhouseCoopers, Deloitte, and
KPMG - to audit their books.