For the FRC to become involved means *epic* levels of s**t auditing to be involved
Which, given the level of write down, is not exactly a surprise.
Do Deloitte was the "Big Five" member involved.
The Auditor that likes to say "Yes"?
The UK's Financial Reporting Council has announced that it will investigate "the conduct of Sushovan Hussein", a month after a US court found the former Autonomy chief financial officer guilty of fraud. In addition, the corporate governance watchdog is also going after Deloitte auditors Richard Knights and Nigel Mercer, along …
I'm going to guess that the FRC will find nothing wrong.
Commentards here predicted it wouldn't end well based on published information, and their knowledge of the market. Other people considered buying it and walked away because it was too expensive.
I've been asking from day 1 why the auditors got a free pass in this as this is exactly the sort of thing they're supposedly to find. I heard people argue that you can hide certain things from auditors with a bit of effort, but - given the post-merger gap- I'd say they must have been very actively looking the other way to "miss" the apparent chasm.
The only disappointing thing is that they go after people instead of the company as a whole which ignores inner culture and seems to be aimed at limiting the damage.
Auditors should challenge but they dont. Thats a big problem.
However hp due dil should have found this sort of fuckwittery.
So, did hp duedil find issues?
If they didnt the hp duedil acvountants should ve sued.
If tgey did but were ignored by the board tgen tge board should be sued.
4% of global turnover should make a nice contribution towards the NHS black hole. Unfortunately the British government never seems to have the gumption to fine any big player, while the US imposes fines so big that the global corporates rip-off the rest of the world to pay them.
A basic problem with corporate audits is that the company needing an audit CHOOSES and has to pay the auditors. If my corporation hired your auditing firm to do my government-required audit, and you give me a bad report, how likely am I to hire you next year? So there's a strong motivation here for auditors to give a glowing report to all their customers.
Shades of Authur Anderson and Enron.
Just like the Banks could not be faulted, the auditors will also not be faulted.
This is a universal law !!!
I cannot think of any auditor company ever getting more than a slap on the wrist for not 'noticing' someone was lying or cooking the books etc. At worse, the fault is always down to 1 or 2 people who are publically 'hanged' to show such bad performance is not tolerated by the company.
(Rather like the rogue engineer idea in the dieselgate saga !!!???)
Although that is the job they are paid for, as stated, the need to be paid again in the future tends to take the sharp edges off any reports and often the company will get indirect 'assistance' in correctly framing the accounts in the 'right' manner to pass any audit with flying colours. The next years audit will then by pure happenstance be with the same firm, who cannot find fault with the previous years audit as a matter of course. Rinse & repeat year after year. Easy Money and a nice update for your CV.
I cannot think of any auditor company ever getting more than a slap on the wrist for not 'noticing' someone was lying or cooking the books etc.
Really? Arthur Anderson was forced out of the business for 12 years due to their failure to catch Enron at its games. That may not be sufficient in some people's minds, but it's more than "a slap on the wrist".
Enron is the exception that was SO huge it could not be missed.
I don't think one company being punished is sufficient considering the amount of audits that are performed and I also don't believe that there has been no other 'major' cock up by auditors.
Finally, I don't think it works on the basis that One company is punished for 12 years SO they are able to absorb all the 'Payback' for all other sins in that period.
PricewaterhouseCoopers are fined £6.5million .....
Partner gets fined £325,000 and 15 year ban.
(After 30 years with PWC has no Career as Auditor ..... officially ... as always there are ways!!! ).
Sound familiar !!!
It may hurt PWC slightly (2017 Revenues £3.6 billion) but the Partner is 'hanged' for their sins !!!
[Not going to mention the ability to 'negotiate' your own fine !!!???]
There have been a 'few' other fines but also in the region of £3million or so when the audit companys are pulling in many billions.
So .... 'Yes' ..... Slap on the Wrist !!!
(More about 'Warning' others to NOT get caught !!!)
Not actually true. The only vote shareholders get is to dismiss (i.e. not reappoint) an auditor recommended by the Directors. Which looks to me rather close to also being a vote of No Confidence in the Directors themselves.
And if you don't know there's anything wrong because the Directors and Auditors are concealing it ...
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