The Financial Services Authority today announced that they were closing their supervisory investigation into the Royal Bank of Scotland Group, as one of the UK banks that required partial taxpayer bailout support. The FSA conducted this detailed investigation with the support of PWC. The question is whether PwC were able to conduct this work objectively and without conflict given that they are one of the largest providers of consulting services to RBSG?
In this case there is no conflict with the audit as Deloitte are the bank's auditors, but how critical could PwC be of RBSG when many of the senior management at the time of the ABN Amro acquistion and the capital raisings, a primary focus of the investigation, are still in place and will be key decision makers and approvers of consultancy spend?
Not that anyone is suggesting that PwC was anything but professional in performing their work with the FSA, but there is the question of perception.
As the Big 4 (PwC, KPMG, Deloitte and E&Y) continue to acquire and consolidate consultancy firms and the Competition Commission looks at the consultancy market, questions must be raised as to where the truly independent advice comes from?