HSBC, New Century And Wells Fargo's Financial Audit
According to the case, KPMG’s audit clients in the mortgage industry included the largest subprime lenders such as Country wide, HSBC, New Century and Wells Fargo. This gives KPMG advantages because, first of all, they have enough experience, knowledge, and skills to audit those types of companies properly.
However, as auditors worked on the same type of companies over and over again, they might lose their attitude of skepticism towards their clients because they get familiarized with them. The familiarity may post risks to the independence of the auditor. If an auditor is too familiar with a client, he or she may not deal with the client’s business with appropriate methods and therefore increasing the risk of internal control. The staff
However, as auditors worked on the same type of companies over and over again, they might lose their attitude of skepticism towards their clients because they get familiarized with them. The familiarity may post risks to the independence of the auditor. If an auditor is too familiar with a client, he or she may not deal with the client’s business with appropriate methods and therefore increasing the risk of internal control. The staff