Watch­dog de­fers in­quiry into KPMG au­dit role

The Irish Times - Friday - The Ticket - - BUSINESS NEWS - TOMLYONS

The Char­tered Ac­coun­tants Reg­u­la­tory Board (Carb) has de­ferred any in­ves­ti­ga­tion into the con­duct of KPMG as au­di­tors of Ir­ish Na­tion­wide Build­ing So­ci­ety (INBS) beyond the end of the Oireach­tas bank­ing in­quiry.

In a let­ter sent to Sinn Féin fi­nance spokesman Pearse Do­herty on Wed­nes­day Carb said it had con­sid­ered his de­tailed com­plaint about the so­ci­ety, the col­lapse of which had cost the State ¤5.4 bil­lion, at a meet­ing of its com­plaints com­mit­tee on Septem­ber 23rd and had de­cided to “de­fer” do­ing any­thing.

Mr Do­herty had asked Carb to in­ves­ti­gate whether KPMG failed “to de­tect, high­light and in­ves­ti­gate the ex­tra­or­di­nary poor lend­ing prac­tices in place in Ir­ish Na­tion­wide” as well as its “lack of in­ter­nal con­trols” be­tween 2006 and 2009.

He also said he wanted it to in­ves­ti­gate why KPMG had not pre­vented the “ex­tent of chief ex­ec­u­tive/man­age­ment over­ride in Ir­ish Na­tion­wide” as well as to ex­am­ine why it had not high­lighted in au­dit re­ports to mem­bers of the so­ci­ety is­sues around IT con­trols and lack of sys­tems that helped cause its col­lapse.

Carb said it had re­viewed Mr Do­herty’s com­plaint made on March 12th and the re­sponse of KPMG on June 6th and “di­rected that the in­ves­ti­ga­tion into this mat­ter be de­ferred”. It said it would not con­sider the mat­ter again un­til there had been an “out­come” of three mat­ters it claimed re­lated to the sub­ject mat­ter of the com­plaint.

Th­ese were, it said, Carb’s re­view of the au­dit of INBS for the year ended De­cem­ber 2008 as well as the con­clu­sion of any “on­go­ing lit­i­ga­tion” re­lat­ing to its au­dits his­tor­i­cally. It said it was not pre­pared to con­sider any in­ves­ti­ga­tion be­cause of the “pend­ing bank­ing in­quiry which will con­sider the au­dit of the cov­ered fi­nan­cial in­sti­tu­tions in­clud­ing Ir­ish Na­tion­wide Build­ing So­ci­ety”.

Mr Do­herty said he was “dis­ap­pointed” at Carb’s decision.

“It is com­ing up with ex­cuses not to in­ves­ti­gate. It sends a ter­ri­ble mes­sage. This is the body re­sponse for hold­ing au­di­tors to ac­count in a timely man­ner and it is not in my opin- ion,” he said.

He said the fail­ings in INBS were so en­demic and sys­tem­atic they de­manded im­me­di­ate in­ves­ti­ga­tion.

“This is kick­ing it all down the road un­til 2016 at the ear­li­est,” he said.

Sep­a­rately, on Mon­day, High Court judge Mr Jus­tice Brian McGovern strongly crit­i­cised the con­tin­u­ing fail­ure over months to make a decision whether ac­coun­tancy firm KPMG should, in its ca­pac­ity as for­mer au­di­tors to INBS, be sued as a co-de­fen­dant in sep­a­rate ac­tions by State-owned IBRC against Michael Fin­gle­ton and other for­mer direc­tors of the so­ci­ety. He said it was “a mat­ter of con­cern” there was no decision.

Pearse Do­herty: ‘dis­ap­pointed’ at decision on in­quiry into KPMG role

Newspapers in English

Newspapers from Ireland

© PressReader. All rights reserved.