The Treasury select committee has asked the auditing watchdog to appear before it in the new year to explain its investigation into KPMG's 2007 and 2008 audits of HBOS.
This morning (30 November) the Financial Reporting Council published a report into its investigation, which concluded in September after clearing KPMG of misconduct in relation to its work with the lender.
It came to the conclusion KPMG's audit of HBOS's results did not fall "significantly short of the standards reasonably to be expected".
In a letter to Nicky Morgan MP, the committee's chairman, the chief executive of the Financial Reporting Council Stephen Haddrill said the regulator has learnt from this process and asked for the committee's help in getting more powers.
But Ms Morgan said the Financial Reporting Council, which acknowledged it could have been more proactive in its investigation, may have more questions to answer.
She said: "This long-awaited report rightly acknowledges that the Financial Reporting Council should have been more 'proactive' in investigating KPMG's audit of HBOS.
"It was only through pressure from the Treasury Committee that the Financial Reporting Council decided to act.
"As Mr Haddrill says, the report sets out the lessons that the Financial Reporting Council has 'learnt for the future'.
"We will be calling the Financial Reporting Council to give evidence in the new year to discuss whether their conclusions go far enough."
HBOS was bought by Lloyds in September 2008 but less than a month later had to draw down on Bank of England emergency liquidity assistance as customers withdrew deposits.
There had been concerns it was under severe strain for months but just seven months previously KPMG had given an unqualified audit opinion on its December 2007 financial statements.
In September the Financial Reporting Council ruled KPMG's assessment of the bank's health was "not unreasonable at the time".
In this morning's report the Financial Reporting Council said it accepted that it was not "sufficiently proactive" in making enquiries about the HBOS audit and relied too heavily on the work of then regulator, the Financial Services Authority.
Mr Haddrill said the Financial Reporting Council had not been proactive because it was concerned its limited powers to get information from companies meant it should wait for the FSA to finish its work.
Mr Haddrill also acknowledged concerns that the Financial Reporting Council employs too many people with a background in the major accounting firms it is tasked with regulating.
He said there are already rules in place preventing anyone who has practised as an auditor in the past three years from being involved in regulatory decisions but he said the Financial Reporting Council is now conducting a review into this issue.
damian.fantato@ft.com
