Britain's accounting watchdog has said it should have been faster to investigate why KPMG gave HBOS's accounts the green light just seven months before the bank had to be rescued by Lloyds Banking Group PLC (LON:LLOY), according to a report by newswire Reuters.
The Financial Reporting Council (FRC) said in September it was closing its investigation into the audit, saying it had found that KPMG's work for HBOS "did not fall significantly short of the standards reasonably to be expected".
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But on Thursday, Reuters said, the FRC called on parliament to make it easier to bring cases against accountants wherever they work, and also promised to be more open about its work after it was accused of being too weak and opaque.
In a letter to Nicky Morgan, chair of parliament's Treasury Select Committee, the FRC’s chief executive Stephen Haddrill said: "We should have adopted a more proactive approach to our early enquiry in relation to HBOS rather than a heavy reliance on other regulators."
Morgan said the FRC would be called before the committee in the new year to discuss whether its conclusions went far enough.
The FRC said it wanted to make it easier to take action against accountants who are members of professional bodies for breaches of relevant rules.