Taking Stock: Spotting accounting flaws is child’s play

Taking Stock: Spotting accounting flaws is child’s play

A secondary school student in Barcelona, spotted discrepancies in Abengoa accounts - apparently overlooked by auditors Deloitte

A 17-year-old schoolboy has achieved what the auditors of Spanish engineering and renewable energy giant Abengoa could not – predict the company’s possible collapse a year ago.

According to reports in The Guardian, Pepe Baltá, a secondary school student in Barcelona, spotted discrepancies in Abengoa accounts – apparently overlooked by auditors Deloitte – as part of an economics project.

“If it does not act soon, there is a strong risk Abengoa will go into bankruptcy,” Baltá wrote in an 18-page analytical report on Abengoa for 2012 and 2013.

“I have some accounting knowledge,” he told El Mundo newspaper, “and Abengoa’s accounts did not seem to add up. There was a lot of debt and few active assets compared to fixed ones. The big surprise was that negative profits were being converted into positives. I didn’t understand how they could do that.”

The troubled outfit filed for bankruptcy protection last month and banks have employed KPMG to examine its accounts to get a clearer understanding of its financial position.

Baltá said neither Abengoa nor Deloitte have tried to recruit him. “I don’t know if it’s because they haven’t heard of me or because they’d rather not have anything to do with an 18-year-old boy,” he said.

Whitepaper

The Future of Finance is in the CFO's Hands

Business The Future of Finance is in the CFO's Hands

1m
Save a Week a Month Consolidating Accounts

Accounting Software Save a Week a Month Consolidating Accounts

2m
Mitigating Risk Through Internal Control

Legal Mitigating Risk Through Internal Control

3m
Could tax season have run more efficiently?

Corporate Tax Could tax season have run more efficiently?

3m

Related Articles

Will Deloitte get 5-year ban in India?

Audit Will Deloitte get 5-year ban in India?

3w Tom Lemmon
KPMG, Deloitte and the audit dilemma

Audit KPMG, Deloitte and the audit dilemma

6m Emanuela Hawker, Reporter
What is the future of audit?

Audit What is the future of audit?

6m Beth McLoughlin, Managing Editor
Fined by FRC: Grant Thornton next in the firing line

Audit Fined by FRC: Grant Thornton next in the firing line

9m Emanuela Hawker, Reporter
FRC data on Big Four audits may highlight need for industry overhaul

Audit FRC data on Big Four audits may highlight need for industry overhaul

10m Lucy Skoulding, Reporter
BDO maintains lead in AIM auditor rankings

Audit BDO maintains lead in AIM auditor rankings

10m Lucy Skoulding, Reporter
PwC replaces Deloitte as Linklaters auditor after Arsenal lawsuit

Audit PwC replaces Deloitte as Linklaters auditor after Arsenal lawsuit

10m Alia Shoaib, Reporter
PwC ordered to pay $625.3m over failure to detect Colonial Bank fraud

Audit PwC ordered to pay $625.3m over failure to detect Colonial Bank fraud

11m Alia Shoaib, Reporter