KPMG is to be investigated by the accountancy profession’s senior watchdog over its role as auditor to collapsed Independent Insurance group. The news comes as Class Law, a law firm working for around 1,000 former policyholders, builds up a multimillion pound case against the firm.
Chris Dickson, executive counsel at the Joint Disciplinary Scheme, the watchdog charged with investigating breaches by ICAEW members and member firms, will compile evidence to assess whether KPMG and Dennis Lomas, former finance director of the company and an ICAEW accountant, contributed to the company’s collapse.
The JDS can impose heavy fines on firms and ban accountants from practising.
A statement from KPMG said: ‘The factors surrounding the collapse of Independent are very complex with clear evidence that information was withheld from both ourselves, our advisers, the board and the regulators.’
Concerns arose in May when actuaries Watson Wyatt uncovered huge losses from claims that had not been entered into the company’s accounting system.
PricewaterhouseCoopers was appointed provisional liquidator at Independent following the insurer’s decision to suspend writing new business in June.
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