Big Four firm Ernst & Young could come under renewed pressure over its role in Equitable Life's financial crisis following the release of an independent report that revealed a further £1bn black hole in the life assurer's accounts.
Link: E&Y eyes Equitable for £1m costs
The report has attracted the attention of the Accountants’ Joint Disciplinary Scheme which has already questioned E&Y over the Equitable affair.
Chris Dickson, executive counsel of the JDS, told Accountancy Age: ‘The JDS has noted the report with interest’.
Colin Slater, a partner at accountants Burgess Hodgson, the firm commissioned by the Equitable Members Action Group to produce the report, said it proved policyholders were failed by management and regulators for more than a decade.
‘Can they (appointed actuaries and auditors) explain why they did not feel it necessary to include in the financial accounts for 1998 and 1999 the substantial GAR cost provisions made in the actuarial returns,’ states the report.
Roland Ford, a partner at law firm, Stephenson Harwood, which has worked closely with the JDS in the past, said it was possible that in light of the new report the court would allow Equitable to redraft its claim against E&Y. Current estimates for Equitable’s deficit run to more than £2.8bn.
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