.
In what could be considered as a major victory in the “communities vs. Big Business” battle, the
Instead of conducting a thorough vetting by the Big Four audit firm’s internal ombudsman, important facts that point to a large-scale conflict of interest seem to have been missed, resulting in 70 MPs and academics calling for the accountancy firm to be dropped in an open letter to the Prime Minister.
The audit firm perhaps should have recused itself, which is a matter for an industry watchdog to consider. As a result of this oversight, the firm’s reputation has once again been questioned, according to press reports, after it had recently been linked the failed HBOS and Cooperative Bank audits in the UK, as well as its flawed auditing of overseas banks including Wachovia, New Century Financial, Wells Fargo, Countrywide and Banca Monte dei Paschi di Siena for which it paid out millions of dollars in fines and settlements.
The open letter raised concerns about the fact that KPMG audits the parent company of Celotex, which produced the insulation on the building, alongside its role as auditor of the Royal Borough of Kensington and Chelsea (RBKC), and Rydon Group, the contractor that refurbished
The letter’s signatories said that if the prime minister wants the public inquiry to have the confidence of the local community this is not the way to do it.
Although the audit firm claims total innocence in this case, the blame should, in fact, be directed at whoever reviewed and awarded the contract in the first place.
Lessons to be learned for
Apart from the Auditor General, who (unfortunately) has a limited mandate, no-one else, not even the police seem to have the authority or the willingness to investigate scandals and corruption thoroughly. As a result, Cyprus has been clawing itself up the rankings of nations with poor transparency mechanisms, with these laws often conceived and passed in parliament by the lawyer-deputies themselves. This is, after all, why checks and balances often fail in
Low-income couples continue to be dragged through the courts over a tax debt of a couple of hundred euros, households below the average income wrongly benchmarked to civil servants and bank employees, continue to struggle with their mortgages and debts, while well-known crooks, with the blatant blessing of politicians, seem to be getting away with a slap on the wrist.
This situation epitomises the lack of trust in the political system and the general apathy for the upcoming presidential elections.
While KPMG will generally come out unscathed from the Grenfell Tower inquiry fallout, it also provides for a unique opportunity for the audit firm and its fellow Big Fours to do some soul-searching and try to project a friendly, fair and transparent image. In Cyprus, we need to clear up the mess of the inefficient public sector first, before we deal with the services sector.
