Rock auditors braced for MP grilling

The head of assurance at
Richard Sexton is to face a grilling from Treasury select committee MPs over his
firm’s audit of struggling bank
Northern Rock.

The hearing will be the first time senior PwC partners have answered
questions publicly on the firm’s role in the chain of events that forced
Northern Rock to go cap in hand to the Bank of England in September for billions
of pounds in rescue funds.

MPs were tight-lipped about the content of the questions, but the audit head
is almost certain to be asked whether PwC should have warned the markets of the
risks facing Northern Rock.

He may also be asked when PwC found out about the issues facing the bank’s
funding model and about the allegations made over PwC receiving huge non-audit
fees for help with securitisation and wholesale funding. Sources close to the
firm have said the work was in fact audit related and presented no conflict of

Sexton will appear before the committee next Tuesday morning and is likely to
be accompanied by a fellow senior colleague, a PwC spokeswoman said.

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