Companies

Barclays Kenya replaces KPMG after two years

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Barclays Bank of Kenya managing director Jeremy Awori. FILE PHOTO | NMG

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Summary

  • Barclays Bank of Kenya (BBK) #ticker:BBK is set to appoint Ernst & Young (EY) as the firm’s new auditor, parting ways with KPMG Kenya that had audited it for the last two years.
  • In a notice to shareholders, BBK’s board has included change of external auditors as part of the agenda during the annual general meeting (AGM) set for May 29 in Ruaraka, Nairobi.
  • The change is subject to endorsement by shareholders.

Barclays Bank of Kenya (BBK) #ticker:BBK is set to appoint Ernst & Young (EY) as the firm’s new auditor, parting ways with KPMG Kenya that had audited it for the last two years.

In a notice to shareholders, BBK’s board has included change of external auditors as part of the agenda during the annual general meeting (AGM) set for May 29 in Ruaraka, Nairobi. The change is subject to endorsement by shareholders.

“The company, having received special notice in this regards, to consider if thought fit pass the following as ordinary resolution: That EY be appointed as the new auditors of the company in place of KPMG Kenya with effect from the end of this meeting,” reads the AGM notice in part.

The decision mirrors that of its parent company Absa group which last year offloaded KPMG in the wake of the South African Auditor-General’s office also terminating its services. Its credibility was put to question over work done for the controversial Gupta family, which faced a corruption investigation in South Africa.

The firm apologised in December repeatedly for its role in South Africa’s recent corruption scandals which have damaged its reputation.

KPMG is among international companies embroiled in a scandal that also tainted US consulting firm McKinsey & Co, which has since taken responsibility for irregular work done in the country.

KPMG started auditing Barclays Kenya in 2017 after replacing PricewaterhouseCoopers (PwC).

In 2016, KPMG earned Sh40 million for auditing BBK books of accounts. Last year’s disclosures are yet to be uploaded on BBK’s website.

This will be the first time in 16 years for EY to audit BBK. PwC was the one auditing Barclays Kenya for 13 consecutive years spanning 2004 to 2016, according to annual reports available on the lender’s website.

KPMG Kenya will now be left with about 18 clients that are listed on the Nairobi Securities Exchange (NSE).

In 2017, it made more than Sh250 million from these clients which include Limuru Tea, Standard Group and insurer Liberty Kenya.

The Big Four audit firms, namely PwC, Deloitte Kenya, EY and KPMG, earned more than Sh781.8 million collectively from auditing 51 out of the 63 NSE firms in 2017.

An attempt by auditors to fix their fees was last year blocked by the Competition Authority of Kenya which argued that the move may decrease competition, reduce innovation and efficiencies, and limit customer choice.