In its last audit, only weeks before the bank’s collapse, KPMG, which audited the bank for 19 years, highlighted potential loan losses but failed to flag the unrealised bond losses that ultimately led to the bank’s downfall.

While KPMG defends its work, citing market-driven events occurring post-audit, it now faces increased scrutiny under new regulations.

A spokesman for KPMG told The Times: “Due to client confidentiality, we have no specific comment. We conduct our audits in accordance with professional standards. Unanticipated events or actions taken by management after … an opinion could not be contemplated as part of the audit.”