KPMG retains Standard Chartered audit

Standard Chartered Bank has declared its decision to retain KPMG as its external auditors after an extensive open tender process, defying expectations of a change after the audit firm's more than four-decade-long tenure.

In an official statement, the bank conveyed its intent, as outlined in the 2012 annual report, to undergo a tendering procedure in 2013 for the statutory audit work of the group, aligning with recommendations from the UK Financial Reporting Council.

Standard Chartered and KPMG weathered sustained criticism in 2012 from shareholder governance entity Pirc. Pirc contended that the use of international accounting rules (IFRS) enabled Standard Chartered to inflate its financial position in the 2011 accounts by a staggering $3.6 billion (£2.2 billion).

Today's announcement from Standard Chartered elucidates that the bank's audit committee, following a meticulous and open tendering process, has endorsed KPMG to continue as the group's statutory auditor. The board has duly approved this decision, slated for presentation at the bank's 2014 Annual General Meeting in May.

The statement from Standard Chartered underscores, "It's imperative to note that a conclusive decision required assurance that the group would derive substantial benefits from a novel approach, justifying the considerable challenges inherent in transitioning to a new auditor."

As per the 2012 annual report, KPMG received compensation of $3.8 million (£2.3 million) for the group audit and an additional $10.7 million (£6.5 million) for auditing Standard Chartered subsidiaries. Non-audit services garnered an extra $4.2 million (£2.5 million).

Simon Collins, the UK Chairman of KPMG, commented, "Our global KPMG audit team underwent rigorous evaluation during the demanding tender process. Despite the longstanding association between the firm and Standard Chartered, we approached the process with no assumptions. The tender process afforded the Standard Chartered Audit Committee an opportunity to objectively assess the rigor of our audit, and we are gratified that the excellence of our work has been acknowledged, culminating in a successful bid."