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HSBC plans to review its current auditor as incumbent KPMG has handled the audit for 22 years.
An HSBC spokesperson said that HSBC had ‘decided to review its auditor to meet with the new Financial Reporting Council (FRC) Governance Code recommendations on reviewing audit contracts’. FRC has recommended that companies put their audit out to tender at least every ten years, but has not called for audit rotation.
KPMG has been the group’s auditor since 1991, when HSBC Holdings became the ultimate holding company of the group, without a tender process for the external audit contract having taken place.
In the annual report, issued 4 March 2013, HSBC stated that ‘it is our intention that a tender process for the external audit contract will be undertaken, with the successful audit firm being appointed by 2015’.
KPMG earned an audit fee of US$47.2m (£29.5m) in 2012, with a total fee of US$80.5m, including tax-related fees such as taxation compliance services and taxation advisory services, as well as assurance services. This was down from a total fee of US$87.1m in 2011.
KPMG was unavailable for comment on the retender process.
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