'Surprise' at decision
KPMG ousts head of financial services following conduct probe
High standards: KPMG has taken swift action
The head of KPMG’s financial services consulting division, Tim Howarth, has left the big four practice following an investigation into alleged misconduct.
Mr Howarth led one of the firm’s most important divisions, which generates significant revenue for the company.
He has expressed his surprise at the announcement which emerged as he appeals against the decision.
In a statement, KPMG said: “We hold all of our people to a very high standard and take swift and appropriate action against any individual whose behaviour contravenes the firm’s values.
“We can confirm conduct issues have been raised related to a partner and following an internal investigation and disciplinary panel, that partner has left the firm. Under our process the partner has appealed.”
KPMG declined to comment on the detail of the “conduct issues”.
Commenting to the Financial Times on the timing of the outcome of the disciplinary panel, Mr Howarth told the Financial Times: “[It] is bizarre as the decision is under appeal. I have not been given the reason for that decision. I had already resigned from the KPMG partnership.
“I did not believe that the process was fair or would lead to a just outcome. There is no complainant and there were no formal allegations pursued by anyone,” he said.
His profile has now been removed from the firm’s website.
His departure comes at a difficult time for the firm as it deals with a number of unrelated auditing allegations.
In May, KPMG was fined £5m and “severely reprimanded” after admitting misconduct in its 2009 audit of Co-operative Bank.
In April, it was fined £6m, received another severe reprimand, and was told to undertake an internal review of the way it audited insurance company Syndicate 218 in 2008 and 2009.
City regulator, the Financial Reporting Council, is investigating its audit of the government contractor Carillion, which collapsed under £1 billion of debt last year.
Last year, the FRC said it had found an “unacceptable deterioration” in KPMG’s work and said it would be subject to closer supervision.
All four big auditors are currently subject to review by the Competiton and Markets Authority which has called for a split between their audit and non-audit businesses.
KPMG has declared that it would no longer do consultancy work for the UK’s biggest companies if it was also auditing them.