Audits

The Limited Company was invented to do business and has been very popular with businessmen. Customers have not always been pleased because shareholders can walk away, leaving the debts behind. One protection for the shareholders, that is to say the owners is the Audit, the independent check on the management's book keeping & accounting. Auditors are used to oversee various other types of body. 

That is the theory. The reality is rather different. Auditors have pronounced that various sets of accounts are a fair view of a firm's finances. Then it turns out that they are anything but. Enron aka the Crooked E was one major example. Their auditors were Arthur Andersen, one of the Big Five. Now they are the Big Four. Pleading guilty to Obstructing The Course Of Justice was a tactical move but not good for sales.

In practice that does not mean that Andersen was broken, merely that various accountants have moved on, regrouping under different names. It certainly does not mean that they are any more competent or less expensive. See e.g. Andersen's Fall From Grace. It happened back around 2001.

A current, in April 2019 example comes from Grant Thornton International. One of their senior auditors, David Newstead has been responsible for overseeing Patisserie Valerie since 2014. KPMG, another auditor says that none of the accounts he certified can be relied on. Anything up to £100 million has gone missing.  See Private Eye 1494/42 dated 19 April 2019. It tells us that there were thousands of false entries in shop ledgers followed by cheques bouncing, unnoticed by GTI.

Now KPMG has sold off the mortal remains of la Patisserie for £13 million in a management buyout funded by Causeway Capital Partners. The management should know where skeletons are but then they broke the firm so should they be trusted? You just might feel that they will use this power play to get rich quick.

Then there was Carillion, a conglomerate of builders that went down owing some £7 billion after KPMG certified that its accounts were a true and fair statement of reality. Parliament said that
QUOTE
the collapse was "a story of recklessness, hubris and greed, its business model was a relentless dash for cash", and accused its directors of misrepresenting the financial realities of the business.

The report's recommendations included regulatory reforms and a possible break-up of the Big Four accounting firms.
UNQUOTE.
The break up makes lotsa sense. So does making them insure against their own incompetence. NB The relevant auditors, KPMG suspended Carillion audit partner, one Peter Meehan, and three others. The Guardian put the boot via Carillion fiasco shows why auditors must be accountable to parliament albeit its headline is rather silly. And now, in May 2019 we are told  EY hires top law firm in bid to fight audit reforms. Cleaning up their act is the last thing they want.

 

Limited Company ex Wiki        
In a limited company, the liability of members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. The former may be further divided in public companies and private companies. Who may become a member of a private limited company is restricted by law and by the company's rules. In contrast, anyone may buy shares in a public limited company.

Limited companies can be found in most countries, although the detailed rules governing them vary widely. It is also common for a distinction to be made between the publicly tradable companies of the plc type (for example, the German Aktiengesellschaft (AG), British PLC, Czech a.s., Italian S.p.A., Hungarian Zrt. and the Spanish, French, Polish, Greek and Romanian S.A.), and the "private" types of company (such as the German GmbH, Portuguese Lda., British Ltd., Polish sp. z o.o., the Czech s.r.o., the French s.a.r.l., the Italian s.r.l., Romanian s.r.l.,

 

Audit ex Wiki         
An audit is a systematic and independent examination of books, accounts, statutory records, documents and vouchers of an organization to ascertain how far the financial statements as well as non-financial disclosures present a true and fair view of the concern. It also attempts to ensure that the books of accounts are properly maintained by the concern as required by law. Auditing has become such a ubiquitous phenomenon in the corporate and the public sector that academics started identifying an "Audit Society".[1] The auditor perceives and recognises the propositions before them for examination, obtains evidence, evaluates the same and formulates an opinion on the basis of his judgement which is communicated through their audit report.[2]

Any subject matter may be audited. Auditing is a safeguard measure since ancient times (Loeb & Shamoo,1989).[3] Audits provide third party assurance to various stakeholders that the subject matter is free from material misstatement. The term is most frequently applied to audits of the financial information relating to a legal person. Other areas which are commonly audited include: secretarial & compliance audit, internal controls, quality management, project management, water management, and energy conservation.

As a result of an audit, stakeholders may effectively evaluate and improve the effectiveness of risk management, control, and the governance process over the subject matter.

The word audit is derived from a Latin word "audire" which means "to hear".[4] During the medieval times when manual book-keeping was prevalent, auditors in Britain used to hear the accounts read out for them and checked that the organisation's personnel were not negligent or fraudulent.[5] Moyer identified that the most important duty of the auditor was to detect fraud.[6] Chatfield documented that early United States auditing was viewed mainly as verification of bookkeeping detail.[7]

 

Grant Thornton International ex Wiki          
Grant Thornton is the world's seventh largest professional services network[2] of independent accounting and consulting member firms which provide assurance, tax and advisory services to privately held businesses, public interest entities, and public sector entities. Grant Thornton International Ltd is a not-for-profit, non-practising, international umbrella membership entity organised as a private company limited by guarantee. Grant Thornton International Ltd is incorporated in London, England, and has no share capital.

According to Grant Thornton International Ltd, member firms within the global organisation operate in over 130 countries employing over 53,000 personnel for a combined global revenue of US$5.45 billion.[3] .................

Moldova bank fraud scandal
Grant Thornton Moldova has been accused of incompetence after being the auditor for three of Moldova's banks involved in the Moldovan bank fraud scandal. The theft was discovered in November 2014 at Unibank, Banca de Economii and Banca Sociala, which Grant Thornton Moldova audited in 2011 and 2013 along with KPMG. Stephane Bride, one of the managing partners of Grant Thornton in Moldova, was appointed as the Moldovan Minister of Economy after the scandal broke out. Allegedly, the money was embezzled and spirited out of the country in complex financial transactions, some through UK companies. The authorities had to rescue the three banks with a bailout equivalent to half the annual budget. None of these allegations have been proven and Grant Thornton Moldova did qualify the audit reports for these banks.[15]

 

Enron ex Wiki        
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded in 1985 as a merger between Houston Natural Gas and InterNorth, both relatively small regional companies. Before its bankruptcy on December 3, 2001, Enron employed approximately 29,000 staff and was a major electricity, natural gas, communications and pulp and paper company, with claimed revenues of nearly $101 billion during 2000.[1] Fortune named Enron "America's Most Innovative Company" for six consecutive years.

At the end of 2001, it was revealed that Enron's reported financial condition was sustained by institutionalized, systematic, and creatively planned accounting fraud, known since as the Enron scandal. Enron has since become a well-known example of willful corporate fraud and corruption. The scandal also brought into question the accounting practices and activities of many corporations in the United States and was a factor in the enactment of the Sarbanes–Oxley Act of 2002. The scandal also affected the greater business world by causing the dissolution of the Arthur Andersen accounting firm, which had been Enron's main auditor for years.[2]

Enron filed for bankruptcy in the Southern District of New York in late 2001 and selected Weil, Gotshal & Manges as its bankruptcy counsel. It ended its bankruptcy during November 2004, pursuant to a court-approved plan of reorganization. A new board of directors changed the name of Enron to Enron Creditors Recovery Corp., and emphasized reorganizing and liquidating certain operations and assets of the pre-bankruptcy Enron.[3] On September 7, 2006, Enron sold Prisma Energy International Inc., its last remaining business, to Ashmore Energy International Ltd. (now AEI).[4]

 

Arthur Andersen ex Wiki       
Arthur Andersen LLP, based in Chicago, was an American holding company. Formerly one of the "Big Five" accounting firms (along with PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, and KPMG), the firm had provided auditing, tax, and consulting services to large corporations. By 2001, it had become one of the world's largest multinational companies.

In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United States after being found guilty of criminal charges relating to the firm's auditing of Enron, an energy corporation based in Texas, which filed for bankruptcy in 2001.[1] In 2005, the Supreme Court of the United States unanimously reversed Arthur Andersen's conviction due to serious errors in the trial judge's instructions to the jury that convicted the firm.[2]

The former consultancy and outsourcing practice of the firm separated from the firm's accountancy practice and split from Andersen Worldwide in 2000 whereby it renamed itself Accenture. It continues to operate.

 

Andersen's Fall From Grace
KATHLEEN F. BRICKEY
Arthur Andersen is all but gone. The accounting firm’s undoing follows the collapse of Enron—a major Andersen client—in the first of an unparalleled series of corporate financial fraud scandals. As civil and criminal investigations into Enron’s accounting practices gathered steam, Andersen became the subject of a criminal investigation in its own right for destroying Enron-related documents.

The investigation led to contentious plea negotiations between Andersen and the Justice Department, and when the talks broke down, Andersen was charged in a one-count indictment with obstruction of justice. Andersen’s lawyers later appeared before a federal magistrate at the firm’s arraignment while hundreds of chanting employees—many wearing Andersen T-shirts—demonstrated outside the courthouse to protest the prosecution.

 

Patisserie Valerie ex Wiki          
Patisserie Valerie is a chain of cafés that operates in the United Kingdom. The chain specialises in cakes, and its menu included continental breakfasts, lunches and teas and coffees. The company went into administration in January 2019, prior to a management buyout funded by Causeway Capital Partners.................................

Share suspension and collapse into administration
Trading in the shares of Patisserie Holdings, the parent company of Patisserie Valerie, were suspended on 10 October 2018 following the discovery of potentially fraudulent accounting irregularities, which had led to the possibility that there had been a material mis-statement of the company’s accounts. It was widely reported in the press that there was a multimillion pound black hole in the company's accounts. Luke Johnson, the company chairman, said: "We are all deeply concerned about this news and the potential impact on the business".[8][9]

On 11 October, the company announced that there was a material shortfall between the reported financial status and the current financial status of the business and that without an immediate injection of capital the directors were of the view that there would be no scope for the business to continue trading in its current form.[10]

On 12 October, Hertfordshire police issued a statement saying that: "A 44-year old man from St Albans has been arrested on suspicion of fraud by false representation. He has been released under investigation." It was widely reported that the individual concerned was Chris Marsh, the firm's finance director.[11][12] The Serious Fraud Office announced on its website that it had opened an investigation into an individual at the company.[13] Later that day the company announced details of a rescue plan under which it would borrow £20 million from Johnson[14] and place 31,451,100 ordinary shares at 50 pence to raise new capital of approximately £15.7m before payment of expenses.[15] The rescue plan prevented the imminent bankruptcy of the company and subsequent loss of 2500 jobs, but was criticised in The Daily Telegraph as being against the interests of smaller shareholders.[16]

On 14 October it was reported that two unauthorised and unreported overdrafts of almost £10 million had been discovered.[17]

On 22 January 2019, the firm announced that it had collapsed into administration following failed talks with banks, which the company stated was a "direct result of the significant fraud".[18] The collapse will lead to the immediate closure of 70 of the nearly 200 stores and concessions operated by the group, leading to the loss of around 900 jobs.[19]

On 8 February 2019, Sports Direct made an offer of £15 million for the firm but a few days later, the administrator KPMG rejected it saying that it would need to offer up to £2 million more for it.[20]

Management buyout

On 14 February 2019, Patisserie Valerie announced their administrators, KPMG, concluded an agreement for a management buyout funded by Causeway Capital Partners to acquire the assets and business of Patisserie Valerie from administration for a total of £13m.[21][22]

 

£21m damages bill for Grant Thornton’s ‘flagrant’ audit failures        
AIM-listed AssetCo had contracts to provide and maintain London and Lincolnshire’s fire engine equipment. It had to adjust its 2010 accounts to reflect a gap of more than £235m in its balance sheet, and the UK business was subsequently sold for just £2 in 2012 following a shareholder backlash over losses resulting from accounting irregularities. The company went on to secure refinancing and restructured to focus on operations in the United Arab Emirates (UAE) and elsewhere in the Middle East.

Grant Thornton acted as the company’s auditor for the financial years ended 31 March 2009 and 31 March 2010.

In 2017 the firm’s work was investigated by the Financial Reporting Council (FRC), which fined Grant Thornton £2.275m and gave retired partner Robert Napper a three-year ban and a £130,000 fine after it identified a range of ‘widespread and significant’ failings.

AssetCo then took Grant Thornton to court alleging the firm’s negligence meant that the financial problems and fraudulent reporting at the company were not identified when they should have been, meaning that AssetCo was denied the opportunity to take action earlier. [AssetCo plc and Grant Thornton UK LLP, 2019] EWHC 150].

The court examined Grant Thornton’s actions during the two audits in detail, with the judge saying the firm had shown ‘negligent conduct of the highest order (short of recklessness) amounting to flagrant breach of professional standards’.

The court was told it was common ground that in those years the senior management team at AssetCo behaved in a way that was fundamentally dishonest. During the audit process management made dishonest statements to Grant Thornton, providing the firm with fabricated and massaged evidence and dishonestly misstated reported profits, and flawed and dishonest forecasts and cash flow projections.

Outside of the audit process, management were engaged in dishonestly 'overfunding' assets (i.e., misleading banks as to the costs of new purchases etc., so as to borrow more than was permitted), misappropriating monies, dishonestly under-reporting tax liabilities to HMRC, concluding fraudulent related party transactions and forging and backdating documents.

It was also common ground that at the dates of the 2009 and 2010 Audits, AssetCo's business was ostensibly sustainable only on the basis of the dishonest representations or unreasonable decisions made and taken by management.

In evidence to the court, Grant Thornton said it accepted it was negligent in a number of respects as the company's auditor in failing to detect these matters and in giving the company clean bills of health, and agreed that if it had acted competently, many if not all of the misrepresentations by AssetCo management would have been discovered.

Counterfactual

The bulk of the trial centred on AssetCo claims that if Grant Thornton had acted competently, a series of events would have been triggered with the result that the business of the company would have been revealed as ostensibly sustainable only on the basis of dishonest representations made, and/or the unreasonable positions taken by, management.  It argued that new management would have been brought in, and a substantively similar scheme of arrangement would have been agreed as was reached with AssetCo plc's creditors in 2011.

Moreover, AssetCo claimed it would have ceased incurring expenditure on its loss-making and unsustainable subsidiaries (which would have been revealed as such) and would have focused on the profitable elements of and opportunities for its business, as it has done since March 2011.

Instead, however, the executive directors were permitted to continue to operate the business in a dishonest and unsustainable way, and to incur expenditure in the failing aspects of the AssetCo Group's operations which would not otherwise have been made.

For its part Grant Thornton resisted AssetCo's claim. Although the firm admitted the majority of the alleged breaches of duty, it denied that any of the alleged breaches caused any loss or any recoverable loss to AssetCo.

AssetCo provided the court with a counterfactual, listing actions it would have taken and losses which would have been prevented if Grant Thornton had identified problems, giving the company the opportunity to reach agreement with its lenders and trade creditors and changing its business model.

The company put forward a claim for £31,461,807 in total for loss and damage. This sum included £1.5m paid under a fraudulent related party transaction; £1.65m paid by way of dividends in FY09 and FY10; £23.35m representing the sums expended by AssetCo plc in and/or on behalf of its subsidiaries increasing its loans to them from 31 March 2009 until 29 September 2011; and £15m of investments in the UK business which would otherwise have been ringfenced for the UAE.

Breaches of duty

The judge said: ‘As the breaches of duty were admitted it is easy to lose sight of just how serious those breaches of duty were.

‘They consisted of a catalogue of failures over two audit years that were of the utmost gravity and that went to the very heart of an auditor's duties and the “very thing” Grant Thornton admits it was responsible for but failed to do.’

He went on to state: ‘Those breaches of duty included a failure to exercise proper scepticism which would have led to the detection of dishonesty and prevention of fraud including representations and assumptions made by management during the course of the audit.

’These were the very matters that were allowing AssetCo to continue to trade in a dishonest manner.

‘In such circumstances I consider and find that (leaving aside dividends which are in a category of their own) Grant Thornton’s breaches were of very high relative causal potency in relation to the losses and they also bear the lion's share of relative blameworthiness.’

As a result, Grant Thornton is required to pay £23m in damages to AssetCo. 

A Grant Thornton UK LLP spokesperson said: ‘We are disappointed by today’s judgment on AssetCo plc’s claim and intend to appeal. The work in question was done around 10 years ago. We are working hard to deliver the highest quality standard of work that our clients expect and are continually evolving and improving what we do.’

 

Carillion ex Wiki           
Carillion plc was a British multinational facilities management and construction services company headquartered in Wolverhampton in the United Kingdom, prior to its liquidation - officially, "the largest ever trading liquidation in the UK" - which began in January 2018.[5][6]

Carillion was created in July 1999, following a demerger from Tarmac. It grew through a series of acquisitions to become the second largest construction company in the United Kingdom,[7] was listed on the London Stock Exchange, and in 2016 had some 43,000 employees (18,257 of them in the United Kingdom). Concerns about Carillion's debt situation were raised in 2015, and after the company experienced financial difficulties in 2017, it went into compulsory liquidation on 15 January 2018, the most drastic procedure in UK insolvency law, with liabilities of almost £7 billion.  

In the United Kingdom, the insolvency has caused project shutdowns and delays in the UK and overseas (PFI projects in Ireland were suspended, while four of Carillion's Canadian businesses sought legal bankruptcy protection), job losses (over 3,000 redundancies in Carillion alone, plus others among its suppliers), financial losses to joint venture partners and lenders, to Carillion's 30,000 suppliers (some of which were pushed into insolvency), and to 27,000 pensioners, and could cost UK taxpayers up to £180m. It has also led to questions and multiple parliamentary inquiries about the conduct of the firm's directors, its auditors (KPMG), the Financial Reporting Council and The Pensions Regulator, and about the UK Government's relationships with major suppliers working on Private Finance Initiative (PFI) schemes and other privatised outsourcing of public services (in October 2018, the UK Government said no new PFI projects would be started). It also prompted legislation proposals to reform industry payment systems, consultations on new government procurement processes to promote good payment practices, and proposed FRC reforms to the treatment of directors' bonuses paid in shares.

The May 2018 report of a Parliamentary inquiry by the Business and the Work and Pensions Select Committees said Carillion's collapse was "a story of recklessness, hubris and greed, its business model was a relentless dash for cash", and accused its directors of misrepresenting the financial realities of the business. The report's recommendations included regulatory reforms and a possible break-up of the Big Four accounting firms. A separate report by the Public Administration and Constitutional Affairs Select Committee, in July 2018, blamed the UK government for outsourcing contracts based on lowest price, saying its use of contractors such as Carillion had caused public services to deteriorate.

 

KPMG suspends Carillion audit partner    
A KPMG spokesperson said: ‘Over the past year, we have been performing a thorough review of the firm’s audit of Carillion. Our investigation included the audit team’s response to the FRC’s AQR undertaken during 2017, which looked at aspects of the 2016 audit.

‘Concerns were identified in connection with a small number of documents provided to the FRC’s team during the routine AQR. On discovery of this information, we immediately reported our findings to the FRC..................

Carillion, which had substantial government contracts, collapsed a year ago, putting major projects and thousands of jobs at risk. KPMG was paid £29m to audit Carillion for 19 years. The firm signed off Carillion’s accounts four months before the construction giant issued a profit warning, triggered by an £845m writedown in the value of its contracts, and under a year before it collapsed..................

Peter Kyle, a Labour MP, said: ‘I would not hire you to do an audit of the contents of my fridge, because when I read it, I would not know what was actually in my fridge or not. And that’s the point of auditing, isn’t it? To tell us what actually exists and what’s robust or not.’

 

 

Tesco Director Beats £250 Million Fraudulent Accounting Rap  [ 23 January 2019 ]
QUOTE
Tesco's former UK finance director has been cleared over a £250 million fraud and false accounting scandal after the scandal-hit Serious Fraud Office (SFO) dropped the case against him. Carl Rogberg, 52, was accused of knowing that income was being wrongly included in records to meet targets and make the company look financially healthier than it was.  His trial was abandoned last year after he suffered a heart attack and he was too ill to face a retrial alongside ex-managing director Chris Bush, 53, and John Scouler, 50, the former UK food commercial director. 

Rogberg's acquittal means the SFO has failed to secure any prosecutions despite Tesco having admitted to overstating its profits in September 2014. Its probe is now closed and no further charges will be brought, MailOnline understands. 
UNQUOTE
The Serious Farce Office has a track record of gross incompetence. It was set up to do the heavy jobs and failed every(?) time. Pay peanuts and get monkeys. NB See the face and wonder how he got away with it & why he was ever trusted.

 

Ernst & Young Claim They Did Not Do Fraudulent Audit This Time    [ 15 June 2020 ]
A partner, Amjad Rihan was kicked out for exposing fraudulent auditing in Dubai. He was awarded $10.8 million. Ernst & Young are going to appeal, claiming, in effect that they are not guilty. The lawyers used by Rihan have also been accused of corruption - Leigh Day Defrauded Blacks In Kenya & Stole Compensation Money - Allegedly

Ernst & Young has been in accounting scandals - Bank of Credit and Commerce International (1991), Informix Corporation (1996), Sybase (1997), Cendant (1998), One.Tel (2001), AOL (2002), HealthSouth Corporation (2003), Chiquita Brands International (2004), Lehman Brothers (2010), Sino-Forest Corporation (2011) and Olympus Corporation (2011).

You just might get the feeling that audits are worthless. Private Eye 1521/39 is more forthright, telling us E&Y have been running this fraud since 2012. They will get away with crime because their faces fit.

 

Goldman-Sachs Buys Off Prosecutors For $3.9 Billion  
Isn't that corruption, blatant corruption? Yes. It is also reality. Jews beat the rap again.

 

Jews Buy Off Prosecutors With $3.9 Billion Bribe  [ 5 September 2020 ]
QUOTE
Malaysia has dropped criminal charges against Goldman Sachs following a massive fraud in which the country’s sovereign wealth fund was allegedly raided to buy Picasso paintings, jewellery and a mega-yacht. 

The Malaysian National News Agency, Bernama, has quoted a High Court judge saying the three Goldman units accused of misleading investors have officially been discharged. Charges against a number of Goldman bosses, including its top banker in Europe, Richard Gnodde, are also understood to have been dropped. 

The move was widely expected after Goldman agreed to pay $3.9bn (£3.3bn) to Malaysian authorities in July, a settlement that ended a long-running investigation over Goldman’s role raising money for the scandal-hit 1MDB fund in 2013. 

1MDB was set up to fund infrastructure projects in Malaysia and turn Kuala Lumpur into an Asian financial hub, but instead huge sums were allegedly looted to buy luxury items. US authorities allege that some of the proceeds were laundered through real estate assets and even funded Hollywood movies such as The Wolf of Wall Street, where actor Leonardo DiCaprio starred as a corrupt trader.

The Wall Street bank, which has always denied any wrongdoing and tried to distance itself from the scandal by arguing that it was duped by one rogue banker, helped raise more than $6bn in bonds issued by 1MDB..............

The bank's settlement with Malaysia does not impact claims against others. Jho Low, a Malaysian financier accused by prosecutors of leading the alleged heist, is believed to be on the run.

He is claimed to have taken out enough money to buy a $30m Manhattan penthouse and the 300ft yacht Tranquility, which was later seized and sold for $126m. He spent $8m on jewellery and a glass piano for Australian model Miranda Kerr and bought a Picasso painting for actor Leonardo DiCaprio’s birthday. He has denied any wrongdoing. 
UNQUOTE
That "one rogue trader" took mugs for six [ 6 ] billion so they got off lightly.

 

Jews Selling Addictive Opiates Pay $8.3 Billion To Stay Out Of Prison  [ 25 November 2020 ]
QUOTE
Oxycontin maker Purdue Pharma has pleaded guilty to three federal criminal charges as part of its $8.3 billion plea deal for its role in fueling America's opioid crisis. The Connecticut-based pharmaceutical giant, owned by the wealthy Sackler family, entered guilty pleas Tuesday to charges including conspiracy to defraud the US and violating federal anti-kickback laws.

The pleas were part of Purdue's settlement with the Department of Justice and see the firm finally formally admitting to its role in an opioid epidemic that has contributed to hundreds of thousands of deaths over the past two decades. Since OxyContin was introduced back in 1996, opioid addiction and overdoses have surged across America. 

In 1999 there were less than 4,000 opioid overdose deaths. By 2018, this figure had risen to 47,000, according to the US Centers for Disease Control and Prevention. In a virtual hearing with a federal judge in Newark, New Jersey, the OxyContin maker admitted to all three federal charges. 

On the conspiracy charge, Purdue admitted that from May 2007 through at least March 2017 it conspired to defraud the US. This charge relates to Purdue impeding the Drug Enforcement Administration (DEA) by falsely representing that it had maintained an effective program to avoid drug diversion. 
UNQUOTE
The Daily Mail is pretending they are not thieving Jews.

 

Accounting Firm Being Sued For £63 Million Plus Damages After Secret Information Betrayed  [ 25 November 2020 ]
QUOTE
If you think the saga surrounding  Quindell – now Watchstone Group plc – came to an end when a settlement agreement was reached with Slater and Gordon UK (S&G) last year (read more about that  here), then you are mistaken.

The two camps may have settled over the sale of Quindell’s professional services division (PSD) half a decade ago to S&G, but that didn’t stop Watchstone from going after accounting giant PwC through a new High Court claim. As reported by Insurance Business in 2019, PwC is accused of leaking confidential information that purportedly impacted the PSD transaction...............

Watchstone, meanwhile, clarified that the audit firm had no role in respect of the PSD disposal. It said PwC was paid more than £5 million in fees in 2014 and 2015 for its independent review into, among other things, Quindell’s group accounting policies and cash generation.
UNQUOTE
PwC, ex PricewaterhouseCoopers deal with big money. Do they play straight? Private Eye [1534/39 ] thinks not.

 

UK Audit Regulator Hands Out Record Fines For Worthless Work
QUOTE
The U.K.’s audit regulator imposed record sanctions against audit firms during its latest fiscal year, highlighting the seriousness of recent failures in the industry.

The Financial Reporting Council on Thursday said financial sanctions during the year ended March 31 totaled £46.5 million before settlement discounts, equivalent to $56.6 million and up from £16.7 million the year before. The FRC also said it resolved more cases than in previous years.

Higher sanctions and more concluded cases come as the U.K. is in the midst of a long-awaited overhaul of the audit and accounting industry, which will bring with it a new regulator to replace the FRC called the Audit, Reporting and Governance Authority.

One of the highest fines in the covered period resulted from Grant Thornton LLP’s audits of Patisserie Holdings PLC, the regulator said. The FRC in 2018 launched an investigation into the audits of the financial statements of the cafe chain, finding accounting irregularities. Grant Thornton, which didn’t respond to a request for comment, was fined £4 million. This was reduced to £2.34 million, in part because the firm admitted to failures in the audit work.

Additional sanctions included a £5.5 million fine against PricewaterhouseCoopers for its audits of financial statements of construction group Galliford Try Holdings PLC, which was reduced to £3.04 million after a settlement discount, and KPMG LLP’s audits of Rolls-Royce Holdings PLC. The FRC imposed a £4.5 million fine against KPMG, reduced to £3.38 million after a settlement discount. The regulator found shortfalls with respect to both firms’ audits.

When asked for a comment, KPMG pointed to a previous statement on the Rolls-Royce audit, in which it noted recent investments aimed at improving the quality of its work. PwC also referred to a past statement when asked for comment.

The FRC’s enforcement division has grown 23%, to 64 people, as of March 31, from 52 on April 1 last year, according to the council’s annual report, with more growth expected. Meanwhile, the number of cases opened and closed dipped, with 62 cases closed during the period, down from 103 in the prior year. This was due in part to a decrease in the number of cases opened, which stood at 69 compared with 95 in the previous year, the FRC said.

The number of nonfinancial sanctions—such as a reprimand, an individual ban from the audit profession or an order to appoint an independent reviewer—increased, from 28 to 62, the FRC said.

“The level of financial sanctions imposed in the year underscores the important dissuasive role they continue to play,” said Elizabeth Barrett, the FRC’s executive director of enforcement, in a statement.

A KPMG spokesperson said the firm is working to resolve its legacy issues. The Big Four firm was fined £14.4 million earlier this week for failings related to the audits of construction and outsourcing giant Carillion PLC and data-security company Regenersis PLC. PwC, Deloitte and Ernst & Young declined to comment on the report. Deloitte is a sponsor of CFO Journal.

Write to Jennifer Williams-Alvarez at jennifer.williams-alvarez@wsj.com
UNQUOTE
Are they worth the money? No but they make a lot of it by pretending to do what it takes.

 

Accounting Giant PwC Fined £2.5 Million After Worthless Audit Of BT  [ 10 August 2022 ]
QUOTE
PwC has been fined £2.5m for its audit of BT after a fraud at the telecom giant's Italian arm. 

The accounting giant failed to properly challenge BT's 2017 results, the Financial Reporting Council (FRC) said, even after the discovery of the fraud a year earlier wiped billions off BT's value and prompted a criminal trial which is still ongoing. Richard Hughes, PwC's audit engagement partner for BT, was also fined £60,000. 

UNQUOTE
The point of Audits is to protect the shareholders, the owners against the management. They are pretty much worthless. The Big Five made megabucks out of this racket. Then they fouled big time up by not noticing multigigabuck fraud at Enron, the crooked E. So Arthur Andersen went out of business & the Big Five are now the Big Four. It doesn't mean that we are any safer. The idle/incompetent/useless accountants were just dispersed, doing the same business with different letterheads. Recall that Bernie Madoff managed to steal $65 BILLION while getting a clean bill of health from his auditors. How many people knew that he was the world's biggest thief? Quite a few is my answer but they were largely Jews, just like Madoff.
PS Last month PwC Partners Walked Away With Over £1 Million Each. Only fools and horses work for a living.

 

 

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Updated on  Thursday, 29 September 2022 10:26:24 +0100