Ernst & Young (E&Y) faces a range of penalties for its role as auditor for Equitable Life in the period up to its near-collpase, including an unlimited fine, severe reprimand and an order to pay costs if the Accountants’ Joint Disciplinary Scheme (JDS) tribunal finds against it.

The JDS has has completed a draft report following a four-year investigation of E&Y. The final version and any penalties to be paid are likely to be revealed in December, the Guardian reports.

The big four firm is accused of failing to understand key aspects of Equitable's business, failing to act with sufficient independence and objectivity, and approving the insurer's accounts for several years when they did not give a true and fair view of its finances.

The JDS has also heard complaints against two E&Y partners, Kevin McNamara and Richard Combes and sources said the report was likely to be 'very lengthy and very interesting'.

Further reading:

Treves: Government must face Equitable cost

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