PracticeConsultingAuditor stands by work for Equitable

Auditor stands by work for Equitable

Ernst & Young is standing by its audit work at Equitable Life, the collapsed insurance company, after policy holders called for the firm's role to closely examined.

Rob Holman, a partner and head of the insurance practice at E&Y, said the firm was happy with its work, worth almost £500,000 in 1999.

‘We are comfortable with what we did and we are comfortable with the procedures we used and we are prepared to stand up and be counted from that perspective.

‘We will listen to the Financial Services Authority and see if we can help them,’ he added.

Though the FSA has so far resisted announcing a formal inquiry into events at Equitable – which on Friday announced it would no longer be writing new business and would be a closed fund only – policyholders are pressing for a full investigation into what happened, including an examination of the role of the auditors.

Stuart Bayliss, a director of Annuities Direct,co-ordinator of The Equitable Life Guaranteed Annuities Policy Holders Action Group, said: ‘There’s no doubt the auditors did not question the Equitable Life’s own interpretation of their assets and liabilities. It’s the job of the auditors not just to accept what the company is saying but also to question how it arrived at its numbers.’

E&Y made £1.1m from non audit work at Equitable in 1999 and will continue with an audit for 2000. It is unclear whether the firm will continue as auditor in 2001.

Holman said events at Equitable has come as a surprise to the firm even though the company’s position was becoming increasingly difficult.

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Ernst & Young audit row hits Equitable

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