Everyone knew that Ernst & Young had to be culpable with regard to the failure of Equitable Life. So it was not surprise to note that:
The former auditors of Equitable Life have been fined and reprimanded for their role in the insurer's near collapse, a decade after the event.
Ernst & Young has been fined £500,000 plus £2.4m costs and both the firm and former partner Kevin McNamara have been reprimanded by the joint disciplinary tribunal (JDT), which polices the accountancy profession.
Much more important though is this:
It comes after E&Y appealed against a much more severe judgment issued two years ago. In December 2008 it obtained an injunction which prevented a report produced by the JDT from being disclosed to anyone, including other regulators. That injunction prevented evidence about Bannon and Stewart from being passed to their professional bodies for investigation, until it was lifted six months later.
Can justice really have been done behind threats of super-injunctions?
What meaning has regualtion got when evidence cannot be disclosed?
And what relevance has regaultion got when it takes ten years or so to deliver a verdict?
It's time we swept away the notion of self regulation for good in auditing and accountancy.
E&Y may have got off lightly over Equitable, but its troubles are not over: it is also under the spotlight for its audit of Lehman Brothers, after a highly critical report by former US attorney Anton Valukas. The audit profession has so far escaped sustained scrutiny in the aftermath of the credit crunch. It's about time that changed.
If, as can reasonably be argued, the current financial crisis was caused by a lack of transparency and accountability then there's no doubt auditors were at the core of that failure. I'd actually suggest they helped create it.
And for that they are culpable.