KPMG stands behind audit of Silicon Valley Bank, accounting firm’s US chief says
The chief executive of KPMG’s US business has said the Big Four accounting firm stands behind its audit of Silicon Valley Bank, after it gave the California financier a clean bill of health just two weeks before its collapse.
KPMG chief Paul Knopp told an event at New York University that “we stand behind the reports we issued and we think we followed all professional standards,” the Financial Times first reported.
The KPMG exec argued it is the auditor’s responsibility to “consider all the facts” available to it at the time of signing off on a company’s accounts, as he claimed the Big Four firm “absolutely did do that”.
He added that auditors “can’t know with certainty” what “might happen after that audit report is issued,” including “market-driven” events alongside customers’ “unpredictable” responses to those events.
Knopp’s comments come after the accounting firm signed off on Silicon Valley Bank’s accounts on 24 February, exactly two weeks before US regulators shuttered the California financial institution on Friday 10 March after a run on its deposits.
The Big Four auditor has also faced scrutiny over its audit of New York firm Signature Bank, which collapsed just two days after Silicon Valley Bank.
In signing off on a company accounts, auditors are required to give an appraisal of the firm’s ability to survive the year ahead in identifying any material uncertainties.
Prior to its collapse, KPMG had previously audited Silicon Valley Bank since 1994 and audited Signature Bank since its established 22 years ago in 2001.
A spokesperson for KPMG’s US division said: “Due to client confidentiality, we have no specific comment. Any unanticipated events or actions taken by management after the date of an opinion could not be contemplated as part of the audit.”
“It’s important to recognise that audit opinions, which only address the financial statements and internal controls of the business, are based on audit evidence available up to and at the date of the opinion. We conduct our audits in accordance with professional standards,” the spokesperson said.