Auditors face UK probe after XL Group collapse

London
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UK financial auditing watchdog, the Accountancy and Actuarial Discipline Board (AADB), is to launch a probe into the auditors of collapsed UK travel group, XL Leisure Group.

The UK operations of the group - which included in-house charter carrier XL Airways - stopped operations last month after entering administration. The CAA estimated around 285,000 passengers holding bookings with the group were impacted by the collapse.

Now the AADB - an independent, investigative and disciplinary body for accountants and actuaries in the UK - has announced it is launching an investigation into conduct of BDO Stoy Hayward in relation to the auditing of XL Group. It follows a reference from the Institute of Chartered Accountants of England and Wales.

The AADB says the scope of the investigation shall be the conduct of BDO Stoy Hayward in respect to the audit of the accounts of XL Leisure Group and its subsidiaries for the year ending 31 October 2007.

For its part BDO notes XL Airways operated in a "volatile" market place. "The administrators for XL have previously confirmed that XL entered into administration having suffered as a result of unpredictable fuel prices, the economic downturn, and were unable to obtain further funding," it says, adding further comment would be inappropriate but that it will co-operate any way it can with the AADB.

The French and German divisions of the XL Group were unaffected by the failure of the UK operation.