Monday, May 17, 2010

KPMG and PwC eye rating move

From the Financial Times:

KPMG and PwC, two of the world's largest accounting firms, have considered entering the credit rating business, in a move that would pitch them against the current top three - and heavily criticised - agencies Moody's, Standard & Poor's and Fitch.

John Griffith Jones, chairman of KPMG in the UK and co-chair in Europe, told the Financial Times it had discussed the move as - being one of the four biggest accounting firms in the world - it had the skills, knowledge and people to provide credit ratings.

However, Mr Griffith Jones said KPMG was "passively considering it", not actively debating it.

"It is something that we talk about as a plausible thing to do. It is effectively something we would be proficient at doing . . . But it's not on the agenda at the moment," Mr Griffith Jones said...

Other accountancy firms said they had also seen credit ratings as a potential opportunity for auditors.

Richard Sexton, UK head of assurance at PwC, said it continually looked for areas to grow its business from its "core skills that include assurance, opinions and underpinning public trust".

Mr Griffith Jones said conflicts of interest would be a stumbling block for an auditor to offer credit ratings as they are also paid by the clients they audit.

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