PracticeConsultingBusiness – Andersen auditors hold key to CSG bid

Business - Andersen auditors hold key to CSG bid

Conservative party treasurer Michael Ashcroft’s bid for troubled recruitment company Corporate Services Group hinges on the 1998 accounts receiving the unqualified approval of auditor Arthur Andersen.

Yet in a profit warning issued last week, its second in a month, CSG said its preliminary results for the year to 31 December 1998, due to be released 31 March, would not be released until ‘some time in April’.

The 30 March profit warning estimated that pre-tax profits would be around #20m, compared to the #33.5m anticipated in a statement released on 8 March. ‘As a consequence,’ CSG said, ‘the auditors have informed the board that further work is required in order for the audit to be completed.’

Following the 8 March profit warning, City analyst Merrill Lynch criticised CSG managers – and Andersens – for allowing ‘naive’ and ‘aggressive’ accounting policies that were likely to rebound on the company as write-offs against its 1998 profits. Under the latest warning, the write-offs could exceed #30m.

Following the warnings, institutions representing more than 30% of CSG’s shareholding requested an emergency general meeting and called for chairman Jeffrey Fowler and four directors to resign. One of the conditions of Ashcroft’s estimated #280m bid is that all of the directors remain.

FD David Lake, who joined CSG in December, is said by analysts to be taking the lead in overhauling CSG’s accounting policies.

Neither he nor Andersens were available for comment.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

3m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

9m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

10m Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

11m Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

11m Stephanie Wix, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

10m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

10m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

10m Kevin Reed, Writer