What’s the point of having audits if the board ignores the auditors?The report on the Irish Nationwide annual meeting in last Wednesday’s Irish Times makes for very worrying reading. It transpired at the meeting that the auditors, KPMG, had warned the then chairman of the board and the chair of the audit committee that the society’s short-term loans to Sean Fitzpatrick posed significant reputational risk. It appears that the board felt it was a good idea to support Sean Fitzpatrick as he might be in a position to help the society benefit from business deals. As it happens they didn’t get any benefit. This kind of ‘scratch my back and I’ll (maybe) scratch yours’ parish pump approach to corporate governance is shocking. Frankly it is beyond me how any board member has the brass neck to remain after sanctioning this behaviour, especially when the auditors had expressly warned about it. Just as worrying is the admission that the financial regulator also knew all about it. I know from doing ethical audits how frustrating it is when you uncover problems and no-one at a senior level seems moved to act. I sometimes ask myself why companies bother getting people in to tell them what is wrong if they will not do anything to correct problems. It seems KPMG have the same problem with financial audits. Add a CommentYour comment will appear once it has been approved. |