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Irish defer investigation into KPMG audit

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31st Oct 2014
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The Irish Chartered Accountants Regulatory Board (Carb) has deferred any investigation into the conduct of KPMG as auditors of Irish Nationwide Building Society (INBS) until after the end of a parliamentary inquiry into Ireland’s banking crisis.

In a letter to political party Sinn Féin finance spokesman Pearse Doherty from Carb was quoted by the Irish Times as saying that it had considered his complaint about the society, the collapse of which had cost the State €5.4bn, at a meeting in September and had decided to “defer” doing anything.

Doherty had asked Carb to look into whether the Big Four firm failed “to detect, highlight and investigate the extraordinary poor lending practices in place in Irish Nationwide” as well as its “lack of internal controls” between 2006 and 2009, the newspaper reported.

He also said he wanted it to investigate why KPMG had not prevented the “extent of chief executive/management override in Irish Nationwide” and why KPMG’s audit reports had not warned of IT problems that partly caused the collapse of the building society.

Carb said it had reviewed Doherty’s complaint made in March and the response of KPMG in June 6th and “directed that the investigation into this matter be deferred". Doherty told the Irish Times that he was “disappointed” at Carb’s decision.

“It is coming up with excuses not to investigate. It sends a terrible message. This is the body response for holding auditors to account in a timely manner and it is not in my opinion,” he said.

He said the failings in Irish Nationwide should be investigated immediately.

Although KPMG raised concerns about financial problems at Irish Nationwide in reports going back to 2000, the Big Four firm has come under pressure to reveal how much it knew about what was going on at the mutual.

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