The chairs of three UK Government select committees have written to the Bank of England’s (BoE) Prudential Regulation Authority (PRA), questioning its concerns around Goldman Sachs potentially hiring Grant Thornton as its next auditor.

The three chairs are: Frank Field, Work and Pensions Committee, Rachel Reeves, Business, Energy and Industrial Strategy Committtee, and Nicky Morgan, Treasury Committee.

In an article published by The Times on 10 July, the PRA was reported to have flagged concerns about Grant Thornton potentially not having the ‘required skill, resources and experience to perform its function under the regulatory system’ to audit the investment bank.

The PRA was established following the financial crisis to regulate and supervise the banking sector.

Morgan, Field and Reeves, whose select committees have investigated the collapse of British Home Stores (BHS) and Carillion, wrote to the PRA’s chief executive Sam Woods to query the PRA’s supposed actions by noting that ‘nearly all the banks that failed back then [during the financial crisis] were being audited by members of the Big Four’.

The letter also addressed the issue of Goldman Sachs lack of auditor choice. EY, KPMG and Deloitte are all said to be providing the company with non-audit services which would leave PwC as the only Big Four firm not to be too conflicted.

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However PwC is the Goldman Sachs incumbent auditor and due to EU regulations the company is required to remove them by 2022.

Unless Goldman Sachs severs ties with at least one the Big four firms providing non-audit services, the company will have no other option but to look to a firm outside of the Big Four.

Earlier this year, Grant Thornton announced that it would no longer compete to audit FTSE 350 companies as the firm felt that it could not compete with the Big Four in this market.

Morgan, Field and Reeves closed their letter commenting: “If the PRA were to block Goldman Sachs from appointing grant Thornton then you are introducing your own form of Big Four only clauses. We would very much welcome confirmation from the PRA that this is not your intention.”