Treasury committee slams Equitable audit.

In an interim report, the committee said it did not believe the arrangements were ‘adequate’ and called upon the Financial Services Authority to look into the matter.

The report said: ‘We ask the FSA to consider the justification for the auditors’ judgements and whether there are implications for future reporting practices by auditors generally.’

The committee noted that the directors of Equitable Life had responsibility for drawing up the statutory accounts while Ernst & Young, as auditor, was responsible for forming an independent opinion of Equitable Life’s statutory accounts.

But the committee complained that only specific parts of the regulatory return were subject to an independent assessment. A spokesman for E&Y, which last week stood down as auditor, said the firm was considering the conclusions of the report.

The FSA said it would take on board the recommendations in its on-going work at Equitable, saying that it would be talking with the ICAEW over auditing arrangements.

For more on E&Y standing down see www.accountancyage.com/Practice/1119754.