AN INVESTIGATION into accounting irregularities at listed hosting services provider Phoenix IT has seen an increase in the profit misstatement of millions of pounds.
A review by PwC and Nabarro has found that profit misstatements in its Servo Limited subsidiary amounted to £17.3m after taxation, £23.4m before taxation. An initial assessment had gauged the post-tax misstatement at £14m.
Deloitte recently quit as auditor, with PwC stepping in to replace its Big Four rival.
“The misstatements primarily arose from the deliberate and repeated circumvention of control processes within the finance function at Servo Limited’s Birstall site,” it said in a statement to the stock exchange. “Revenue was overstated and costs were understated over a number of years starting in the financial year ending 31 March 2009.”
Deliberate applications of accounting rules were made – around cost accrual, cost deferment and revenue recognition.
Servo’s divisional FD and financial controller have left the company. A review of accounting and control processes is being carried out across the group by PwC, while Servo’s accounting and finance function is being centralised into Northampton.
Phoenix has restated its profit figures for the past three years.
Smith & Williamson announce appointment of former EY worker John Cooney as partner, ten years after leaving the firm
Burnet is currently the head of KPMG’s Financial Services team in Scotland
BHS owners suggests Phil Duffy, a managing director at Duff & Phelps, has been appointed as administrator
Pell admits he was “a bit surprised” by the letter but believed the audit would re-start after a number of issues have been resolved