JDS to probe Independent auditors
KPMG is to be investigated by the accounting profession's senior watchdog over its role as auditors to Independent Insurance, the group that collapsed in June this year.
The accountants’ Joint Disciplinary Scheme announced its decision today to conduct an inquiry into the role of the auditors, advisers, directors and employees of the insurance company.
Concerns arose over the state of the insurance company in May when actuaries Watson Wyatt uncovered huge losses from claims that had not been entered into the company’s accounting system. Watson Wyatt had provided Independent’s actuarial certificate and KPMG had signed off its 2000 accounts.
PricewaterhouseCoopers was appointed provisional liquidator at Independent following the insurer’s decision to suspend writing new business in June.
In July, Labour MP Barry Gardiner lambasted the auditors for ‘a huge conflict of interest because auditing is a loss-maker and to make a profit they have to sell consulting work’.
A statement from the JDS said: ‘The referral should not be construed as meaning either that a view has been formed that a prima facie case exists against any member or member firm or that such a finding is likely.’
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