Accountancy firm KPMG is facing a regulatory investigation into how it audited the books of troubled lender Co-operative Bank.
The Financial Reporting Council has launched an investigation in the wake of a £1.5 billion hole in the lender’s finances that was discovered last year. It will cover the way accounts were prepared by the bank and reviewed by auditors, and is likely to extend back to 2009, the year it took over the Britannia Building Society.
The new probe is the latest in a series of investigations into the Co-op, including one by the wider Co-operative Group into its structure in the wake of drugs allegations about former bank chairman Paul Flowers, who is a former Bradford councillor and Methodist minister.
Meanwhile, the Co-op is to retain its car and home insurance division after deciding it no longer needs to sell it.
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