BusinessBusiness RecoveryLib Dems blast PwC’s Northern Rock audit

Lib Dems blast PwC's Northern Rock audit

Lib Dems' shadow chancellor Vince Cable and Treasury spokesman Lord Oakeshott urge ministers to ‘go after’ PwC, and even suggest that the firm should step down as auditors

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The Lib Dems have turned up the heat on
PwC, making calls for MPs to
haul the firm over the coals for its audit of Northern Rock.

The party’s shadow chancellor Vince Cable and Treasury spokesman Lord
Oakeshott criticised the firm, urging ministers to ‘go after’ PwC, and even
suggested that the firm should step down as auditors.

Cable pushed for ministers to ‘go after the auditors who failed to spot
glaring problems and mounting bad debt,’ on the day
Northern Rock
released its half-year numbers.

But, in the interim report, the firm has taken a tougher stance with its
client.

It warned that there was a ‘material uncertainty’ Northern Rock could
continue as a going concern because the bank still needs to secure European
Commission approval on its government loans.

Cable added that the government should now ‘go after the former directors who
have managed to shift the bank’s losses on to the taxpayer.’

In communications with the City, Northern Rock’s chairman Ron Sandler said
former FD Dave Jones was no longer a main board member but is still an employee
of the bank.

A Northern Rock spokesperson said: ‘PricewaterhouseCoopers were re-appointed
as Northern Rock auditors in May 2008 and as far as we are concerned there is
nothing further to say.’
PwC refused to comment citing client confidentiality.

Michael Fallon, a member of the Treasury committee backed the call for PwC to
drop its auditor role. ‘I think [PwC] are conflicted,’ he said, referring to the
help the firm also gave the bank in selling on its loans.

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