RSA CFO takes advice on action against auditor Deloitte

by Mark Sands

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09 Jan 2014

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RSA'S CFO is taking advice on whether it can pursue action against its former auditor Deloitte for approving accounts in Ireland which were later found to include inaccurate and misleading information. 

A PwC investigation, which began last year, found that there was "inaccurate and misleading" information included in the insurer's accounts, created by "inappropriate collaboration" between senior executives, Accountancy Age's sister publication Post reports. 

In an analyst call, RSA group CFO Richard Houghton said the company was taking external advice on pursuing its auditor Deloitte for approving 2012 accounts. He added that the company does not believe it has an insurance policy to cover it against losses estimated at be £200m.

"The board is taking appropriate external advice on this issue. We don't think we should comment further at this time, we think it would be inappropriate to do so," Houghton said.

He added RSA group executive chairman Martin Scicluna, who spent 12 years chairing Deloitte's UK arm until 2007, is being excluded from these discussions.

RSA is continuing a business review, scheduled to report at the end of February, in which Scicluna said the insurer is refusing to eliminate any options in raising capital.

KPMG succeeded Deloitte as auditor in May 2013. 

A Deloitte spokeswoman said: "We have not seen the PwC report nor RSA's own review, and are not in a position to comment. Deloitte is committed to delivering the highest quality audit services."

Following the publication of the report RSA announced that a small group of executives were to blame for claims and reserving issues in its Ireland business. It subsequently dismissed its Ireland CFO Rory O'Connor and claims director Peter Burke.

The insurer is not planning to pursue seperate action against O'Connor, Burke or Smith.

Scicluna added that RSA had not received any acquisition bids and declined to comment on whether it had talked to firms about sales of individual units.

"We have done four weeks of work so far, but we've got another seven weeks to go before we make an announcement and we will make sure that by the end of that, our capital position is improved," he said.

"There will be some work achieved and some work still to be carried out [in February]."

RSA is also hunting for a new chief executive following the resignation of its group CEO Simon Lee in December. Scicluna noted the insurer is hoping to name a new chief in time for the conclusions of the review.

The company's Ireland CEO Philip Smith, who was suspended earlier in 2013, resigned in November last year.

"We will continue to work on the business review between now and the end of February when we will make an announcement. It would be good if we had a CEO but if we don't then we will carry on," he said.

 

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Financial Planning and Performance AnalystCabinet Office-Greater London-Competitive

 
 
 
 
 
 
 
 

 

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