HSBC Holdings, the parent company of the HSBC Group, is considering tendering its audit contract for the first time in more than 20 years.
The bank’s long-time auditor KPMG received $81m from HSBC in 2012 for audit and audit-related services apart from tax and other consultancy work.
The tender could provide Ernst & Young, a KPMG competitor, an opportunity to bag the audit contract. The new auditor will provide services to HSBC from 2015.
The British asset manager Schroders ended its long-term audit relationship with PwC recently by hiring KPMG. Insurer RSA and energy group BG have also revealed to change their auditors in the recent times.
In February, the British fair trade regulator Competition Commission proposed that large firms should be allowed to put their audit out to tender as frequently as every five years.
HSBC said its move was prompted by the Financial Reporting Council’s recently adopted stance.
Auditor firms PwC, Deloitte, KPMG and Ernst & Young are in race to audit HSBC’s accounts.
As per the latest ranking of FTSE 100 audit contracts, HSBC stood as the most lucrative assignment just above Barclays and well ahead of RBS, Lloyds, BP and Shell.