Deloitte praised but Rover probe motors on

Deloitte’s audit work has been given a clean bill of health in BDO Stoy Hayward’s report into the collapse of MG Rover, but there is still fallout from the collapse of the failed manufacturer.

The firm is not yet in the clear with accountancy’s watchdogs over its work at the car maker and the profession could even face a revamp of the work it undertakes with clients.

In the report, elements of Deloitte’s corporate finance advice to MG Rover directors “the Phoenix Four” came under the spotlight of BDO Stoy Hayward investigators.

Deloitte was criticised for working with a BMW director who was potentially involved in MG Rover’s bid for its loan book, when BMW itself was disposing the book.

However, Deloitte’s audits for MG Rover were “well planned and executed”, the investigators found.

The profession’s overseer the FRC has been tasked by Lord Mandelson to decide whether audit or accounting standards and guidance need to be altered to ensure greater transparency about the decisions directors make in the context of a company’s financial health.

The FRC said it had kicked off its consideration of the inspectors’ report and would “announce in due course the actions it proposes”.

FRC sub-division the Accountancy and Actuarial Discipline Board is still conducting its own probe into Deloitte’s role at MG Rover, which kicked off in August 2005. It will also consider the findings before deciding how to proceed.

Deloitte said in a statement: “The inspector’s report confirms that our work delivered very significant value to the group, that our audit opinions were appropriate and that responsibility for managing the group’s affairs and the level of remuneration rested with the directors.”