8th Jul 2015 05:46
LONDON (Alliance News) - The UK Financial Reporting Council on Tuesday launched a formal investigation into individuals involved in the auditing of RSA Insurance Group PLC's Irish accounts, 18 months after the insurer revealed accounting problems in the unit had left it with a GBP200 million black hole.
In a short statement published on its website, the UK accounting watchdog said it has "decided to investigate the conduct of certain individual members in connection with financial irregularities at RSA Insurance Ireland Ltd in respect of the year ended December 31, 2012 and relevant prior periods as a result of the identification of issues within the claims and accounting functions" of the FTSE 100-listed insurer at the end of 2013.
The FRC had already been examining the role of RSA's former auditor, Deloitte, in the Irish unit problems, but has now expanded this to focus on individual accountants and actuaries who worked for the insurer.
The move comes a fortnight after an employment tribunal in Ireland ordered the insurer to pay Philip Smith, the former head of its Irish business, EUR1.25 million for unfair dismissal. The tribunal ruled that at least two dozen employees at RSA were aware of the accounting practices that led to the problems, casting doubt on RSA's assertion that a small number of senior executives in the Irish business were responsible for the issues.
RSA has launched an appeal against the ruling, saying the tribunal "reached conclusions which were not supported by the evidence" and denying anyone outside of the Irish business had "any prior knowledge" of the reserving practices which caused the black hole to emerge.
By Sam Unsted; [email protected]; @SamUAtAlliance
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