In response to a strongly worded report by the Commons Treasury Committee, which said it did not believe the auditing arrangements for the statutory accounts and the regulatory returns of life offices were adequate, the Treasury said that it had ‘taken note’ of the committee’s recommendations and the Financial Services Authority would take them forward.
The Treasury said the FSA’s own 16 October review had considered the framework of the regulatory returns required from life offices and made a number of recommendations regarding both content and format.
Without criticising Equitable auditors Ernst & Young, the Commons Treasury committee asked the FSA to consider the justification for its judgements and whether there were implications for auditor reporting practices in general.
MPs have complained that that unlike the ‘true and fair view’ judgement auditors make on company reports and accounts, the auditors of Equitable only covered 28 of the 420 pages of the statutory return and then only had a duty to report on whether these pages had been ‘properly prepared’.
Following the publication of its internal inquiry into its handling of the Equitable case, the FSA said it would launch ‘an examination of the role in insurance regulation of professional advisers and skilled persons, including auditors, the appointed actuary and actuarial quality assurance’
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