E&Y to quit as Equitable Life auditor
Ernst & Young is to stand down as auditor of troubled life insurer Equitable Life 'in order to help its client move forward'.
The firm has been forced to defend its role in the Equitable crisis, having come under fire for giving the insurer a clean audit report despite the uncertainty over a House of Lords ruling which in December forced it to stop writing new business.
A spokesman for the firm said that it was not putting itself forward for relection at the insurer’s annual general meeting in May.
‘What we want to do is to give a clear signal that changes are taking place at Equitable and help our client move forward with its new plans unhindered,’ he explained.
Equitable earlier this week said it would consider taking legal action against organisations or individuals found to have acted negligently in their dealings with the troubled insurer.
According to reports, it has appointed lawyers to investigate members’ claims that they have evidence of malpractice. The insurer has said, however, that so far it has not seen sufficient evidence to take action.
But the E&Y spokesman said the firm was standing by the quality of its audit work, which has also come under scrutiny from the ICAEW and policyholders.
The firm’s 1999 audit fee for the Equitable Group was £478,411. It also earned £1.14m in non-audit services.
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