The Chartered Accountants Regulatory Board (Carb) has deferred any investigation into the conduct of KPMG as auditors of Irish Nationwide Building Society (INBS) beyond the end of the Oireachtas banking inquiry.
In a letter sent to Sinn Féin finance spokesman Pearse Doherty on Wednesday Carb said it had considered his detailed complaint about the society, the collapse of which had cost the State €5.4 billion, at a meeting of its complaints committee on September 23rd and had decided to "defer" doing anything.
Mr Doherty had asked Carb to investigate whether KPMG 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.
He also said he wanted it to investigate why KPMG had not prevented the “extent of chief executive/management override in Irish Nationwide” as well as to examine why it had not highlighted in audit reports to members of the society issues around IT controls and lack of systems that helped cause its collapse.
Carb said it had reviewed Mr Doherty’s complaint made on March 12th and the response of KPMG on June 6th and “directed that the investigation into this matter be deferred”. It said it would not consider the matter again until there had been an “outcome” of three matters it claimed related to the subject matter of the complaint.
These were, it said, Carb’s review of the audit of INBS for the year ended December 2008 as well as the conclusion of any “ongoing litigation” relating to its audits historically. It said it was not prepared to consider any investigation because of the “pending banking inquiry which will consider the audit of the covered financial institutions including Irish Nationwide Building Society”.
Mr Doherty said 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 INBS were so endemic and systematic they demanded immediate investigation.
“This is kicking it all down the road until 2016 at the earliest,” he said.
Separately, on Monday, High Court judge Mr Justice Brian McGovern strongly criticised the continuing failure over months to make a decision whether accountancy firm KPMG should, in its capacity as former auditors to INBS, be sued as a co-defendant in separate actions by State-owned IBRC against Michael Fingleton and other former directors of the society. He said it was "a matter of concern" there was no decision.
