ACCOUNTANTS, AUDIT AND CONFLICT OF INTEREST

That this House notes that PricewaterhouseCoopers (PWC) was Northern Rock's auditor and also provided it with a range of consultancy services; further notes that PWC earned £1.3 million for non-audit work but only £500,000 for the audit; further notes that at no point did PWC indicate any problem with Northern Rock's business model; believes that if an accountancy firm is making more money from consulting for a particular firm than from auditing it then there is a clear conflict of interest; further notes that this is not the first time that the audit of a financial institution has given no hint of systemic financial problems; and therefore calls on the Government to take steps to end this long-standing conflict of interest issue in order that the public may have confidence in the audit process.