PracticeAccounting FirmsCambrian’s a rich seam for Big Four pair

Cambrian's a rich seam for Big Four pair

Cambrian Mining’s recent troubles have generated a massive pay day for two Big Four firms

Vivan Silverman, FD of Cambrian

Big Four fan: FD Vivan Silverman

Auditors
Deloitte
racked up nearly £700,000 in fees as
Ernst
& Young
was also brought in to help the coal producer, which dropped
minnows Chapman Davis for Big Four experience.

Deloitte was paid £304,000 in audit fees for 2007, plus £170,000 for the
audit and £75,000 of accounting advice on the re-issue of Cambrian’s 2006
accounts. The firm was also paid £137,000 for non audit work, while E&Y also
cashed in by an undisclosed amount.

Cambrian was forced to reissue its 2006 accounts after the Financial
reporting review panel red-flagged its numbers.

Once the 2006 re-issue was completed on 18 February 2008, the 2007 financials
were pushed through in four weeks.

The company said: ‘Cambrian’s own, recently augmented, finance team were
assisted by support staff from Ernst & Young in order to achieve this tight
timetable and the board would like to express its appreciation of their efforts
in completing this exercise.’

The group’s share price has rocketed from 51p to more than £1 this week after
it finally rolled out its delayed 2007 annual report with Deloitte and E&
Y’s help.

Cambrian’s fortunes have turned after a turbulent period which led to
questions being asked about its accounting protocols.

Sources close to the company told Accountancy Age that former
auditors Chapman Davis were struggling to handle the auditing demands of the
rapidly growing company, leading to the firm’s replacement by Deloitte in June
2007. The Big Four firm then conducted a sweeping review of its accounting
procedures.

The restatement of the 2006 accounts was needed because the original accounts
did not comply with the Companies Act, made a number of errors and failed to
comply with IFRS, the FRRP said.

Richard Round joined Cambrian as FD in a part-time capacity in 2007 and
overhauled the finance function to address the issues before being replaced by
Vivian Silverman earlier this year.

Silverman said: ‘A Big Four firm was more of an appropriate fit. We’ve now
got one of the strongest finance functions I’ve seen in a while’.

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