“The Company’s Audit Committee and Board of Directors have discussed the subject of these material weaknesses and associated remediation plans with KPMG and have authorized KPMG to fully respond to EY’s inquiries regarding these matters,” said Aspen in a filing with the SEC.
“There are no limitations imposed on KPMG or EY regarding the investigation of any matter related to the company’s financial reporting.”
The company first revealed in its annual report, published in May, that it had found weaknesses in controls and identified a set of corrective actions.
The company’s disclosure controls and procedures have been deemed by its CEO and CFO to be “ineffective in ensuring that information required to be disclosed in reports filed with or submitted to the SEC under the Exchange Act by the company has recorded, processed, summarized and reported in a timely manner, and were accumulated and communicated to management, including the company’s CEO and CFO, to enable timely decisions regarding required disclosure,” the insurer said. in the annual report.
The insurer flagged ‘shortcomings’ in its internal controls, including issues relating to the ‘incorrect treatment’ of foreign exchange gains and losses, with a mismatch leading to an overstatement of the underwriting premium to be received from the UK business .
Additionally, he said there were deficiencies in the “completeness and accuracy” or information used to assess income tax, leading to under-reporting of the tax burden.
He also pointed to the “misapplication of wage value measurement prices engaged when appraising private investments rather than funded appraisals,” resulting in an investment being incorrectly appraised.
And he pointed to “insufficient resources with an appropriate level of knowledge within our reinsurance operations and our accounting team”.
Remediation activities remain “ongoing”, the insurer said in the annual report. These include new credit checks, as well as adding “additional layers of management review” to credit check processes.
Aspen said it would also seek to continue training its relevant staff, hire more operational and accounting staff to assist its reinsurance team, and engage the services of external service providers and local tax advisers.