E&Y to face action on Equitable

Ernst & Young, one of the "big four" accountancy practices, is facing disciplinary action over its role as auditor to Equitable Life, the troubled mutual life assurer.
The Accountants' Joint Disciplinary Scheme, which has the power to censure or fine firms and individuals, has laid charges against E&Y as well Kevin McNa-mara, who was its lead audit partner on the Equitable account, and Richard Combes, a former partner.
The charges relate to E&Y giving an unqualified audit opinion for 11 years between 1990 and 2000, when Equitable almost collapsed.
E&Y is further accused of a "failure to understand" the mutual's business in relation to its controversial policy concerning pensions with a guaranteed annuity rate.
Chris Dickson, executive counsel to the joint disciplinary scheme, has also accused E&Y of a "failure to act with the objectivity and independence which is expected from a firm of chartered accountants and from chartered accountants".
E&Y has said: "We think the allegations are misguided and will defend them vigorously."
If the accusations are upheld, the individuals could be fined or expelled from the profession. The accountancy firm could also face an unlimited fine