Mario Christodoulou, Accountancy Age, Tuesday 26 October 2010 at 09:46:00

The Accountancy and Actuarial Discipline Board is struggling through a recordnumber of cases as it embarks on investigation of KPMG over BAE


The UK?s audit watchdog is straining under the weight of 17 activeinvestigations, as it works through an unprecedented workload in the wake of thecrisis.

The Accountancy and Actuarial Discipline Board (AADB) yesterday announced afresh investigation into KPMG's audit of BAE systems, the latest in a series ofweighty international investigations launched in the past twelve months.

Sources close to the AADB say staff are "stretched", holding the small teamback from working through their cases. Since the crisis the board has launched anumber of high profile investigations touching on the work of all the Big Fourincluding Deloitte's audit of MG Rover, Ernst & Young's audit of LehmanBrothers and PwC's audit of JP Morgan Securities.

The five man team, including three lawyers and two forensic accountants, hasbeen forced to outsource much of their work due to the lack of man power andbudget issues.

Outsourced work is paid for by the accounting institutes and eases thepressure off the AADB's internal budgets. But it can slow down investigationsand prevents the build up of internal expertise.

The AADB has a number of cases nearing completion. In one case a complainthas been filed, although the name of the firm has not been made public due tolegal reasons. In another case a "criticism" letter has been sent, the firststage in a final complaint being filed. The body is also on the verge of sendingout an additional two other "criticism" letters.

The AADB has other cases in the pipeline, expected to be announced in comingmonths.

Further reading:

FormeriSoft FC excluded from the ICAEW after AADB probe