Deloitte criticised over AIM audit client work

Deloitte criticised over AIM audit client work

Audit Inspection Unit hits out at Deloitte's audit work with AIM-listed client

DELOITTE “did not properly fulfil its responsibilities as group auditor” when working with an AIM-listed client, according to the Audit Inspection Unit (AIU).

The watchdog’s annual report into 13 Deloitte audits found “insufficient” audit evidence had been gathered by the firm at an AIM-listed business based outside of the UK.

The UK audit team was involved throughout the audit, with a UK team member based overseas for most of the audit. However, audits of the impairment testing of property, plant and equipment, the valuation of stock held and the completeness of related party transaction were insufficient, the report found.

…”This situation could have been avoided if the firm’s procedures for planning and conducting group audits had been applied properly,” stated AIU director Andrew Jones’ report.

Nine of the 13 audits were performed to a “good standard”; three to an “acceptable standard”; and one that required “significant improvement”.

The report also found weaknesses in the firm’s audit of the impairment of goodwill and other intangible assets. In another three audits the AIU discovered insufficient audit evidence obtained concerning fair value measurements of assets and liabilities.

Five reviews found weaknesses in the firm’s communication with audit committees. Three of those included unadjusted misstatements above the “clearly trivial” threshold neither reported to the audit committee nor included in the schedule of unadjusted misstatements attached to the representation letter.

Some partners over-assessed their own performance and others who provided minimal information to support their self-assessment.

A Deloitte spokeswoman said: “Deloitte believes the external inspection process provides further impetus to our quality agenda.

“The pursuit of the highest quality and integrity in our professional work remains one of the cornerstones of our firm’s continuing success, allowing us to deliver excellence to our clients.

“We were therefore disappointed that one audit file, relating to the audit of a non-financial AIM-listed entity, was found to require significant improvement. We have taken action to address the specific issues that arose in respect of that audit and all of the AIU’s other comments.”

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource