An interesting comment comes through from the Ecology, Britain’s youngest and most democratic building society. The AGM this year had a lively discussion about why KPMG had to be chosen as the society’s auditor. Wasn’t there a choice of auditor more in line with the Ecology’s ethical principles, some members asked?
Well, unfortunately no, not really, was the reply. The latest issue of the Ecology’s members’ newsletter has just come out, and it includes a summary of chief executive Paul Ellis’s response to those member concerns:
“There is a very high degree of concentration in the audit industry,” he writes. “There are, in fact, only four firms that we can approach for external audit, not all of whom are interested, and only five firms that we can approach for internal audit. Our regulators would not be happy if we tried to use a small local firm, even if we could find one that was willing to take on the task”.
But Ellis is clearly not comfortable with the present situation: “We need reform of the structure of the industry,” he argues.
The Ecology has its own blog discussion covering this issue in more detail.