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FRC launches probe into Deloitte over Serco audit

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THE profession’s watchdog has launched an investigation into Deloitte over its audit of outsourcer Serco.

The investigation comes three years after the Serious Fraud Office started a criminal investigation into Serco over its electronic monitoring of contracts.

The FRC said it will investigate the preparation, approval and audit of the financial statements of companies within the Serco group for the financial years ended 31 December 2011 and 31 December 2012.

“This decision follows information received from the Serious Fraud Office which is conducting an investigation into Serco’s electronic monitoring contracts in respect of England and Wales,” the FRC said.

Serco was mired in allegations in 2013 that it overcharged the UK government for the electronic monitoring of criminals.  The SFO inquiry helped spark a series of profit warnings and the departure of chief financial officer Andrew Jenner.

A Deloitte spokesperson said: “Deloitte is committed to upholding the highest professional standards. We take this investigation seriously and will co-operate fully with the Financial Reporting Council.”

Serco declined to comment.

This is the second FRC investigation to be launched this week after the watchdog announced it is investigating KPMG over possible breaches of professional ethics over work it did for Ted Baker while the retailer’s auditor.

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