Allied Irish Banks has sacked PricewaterhouseCoopers as its auditor just weeks after the bank said the accountancy firm could not be blamed for missing the $691m (£470m) fraud allegedly perpetrated by a rogue trader in its US subsidiary.
AIB has repeatedly voiced its content with PwC's audit work. Responding to an independent report published last month on foreign exchange losses suffered at its Allfirst Financial subsidiary, AIB said it was not the auditor's job to detect fraud. The bank's decision to put the external audit out to tender was, it said, taken in the context of other changes to risk management controls made following a review of the control processes.
While PwC is not taking part in the tender process for the audit, it would still be considered for other consultancy work. The tender process is expected to be completed within three weeks. "We would like to express our appreciation to PwC for the work they have carried out for AIB Group to date. We have the highest regard for PwC as a firm and look forward to using a range of their services in the future," said Gary Kennedy, AIB's finance director.
PwC declined to comment on AIB's move.
AIB stunned the City in February when it revealed that a currency trader, John Rusnak, had made huge losses at Allfirst that he had concealed for five years by writing fictitious profitable options contracts into its books. Mr Rusnak is still co-operating with the US Federal Bureau of Investigation and has yet to be charged with any crime.
An independent inquiry into the affair revealed longstanding worries about controls at Allfirst, and described Mr Rusnak as a bully who had been given free rein by his superiors. AIB's other steps to tighten controls include the appointments of a special adviser on risk management, a chief risk officer and other treasury advisers.Reuse content