PwC's Rock work questioned in the Commons
Treasury committee MP asks why Northern Rock audit ignored off balance sheet vehicles
House of Commons Treasury committee vice-chairman Michael Fallon has repeated
concern about PriceWaterhouseCoopers auditing of Northern Rock.
As MPs debated the all party group’s report into banking reform following the
nationalisation of the Newcastle-based bank, the former Tory minister and
opposition Treasury spokesman said that many people had failed during the
fiasco.
Speaking in a Commons debate on Monday afternoon, he said senior management
at the company, non-executive directors, the Financial Services Authority, the
tripartite committee and chancellor Alistair Darling all had to take part of the
blame.
But Mr Fallon added:’We also looked hard at the role of the auditors. I do
not understand how auditors can give a full, fair and firm opinion but exclude
any treatment of the off-balance-sheet vehicles.
‘I find it troubling that Northern Rock’s auditor earned nearly three times
as much in non-audit fees—in consultancy fees—for arranging the securitisation
of Northern Rock’s off-balance-sheet vehicles, as it did for the audit, which of
course excluded them. I find that troubling.’
His comments in the House of Commons followed an Early Day Motion put down by
left-wing London MP Diane Abbott and signed by 30 other MPs expressing concern
about PWC’s role in the Northern Rock collapse.