Link: JDS close to Transtec decision
The Accountants Joint Disciplinary Scheme announced today that Lander, PwC and the pre-merger Cooper & Lybrand will face complaints over the 1997 and 1998 audits of TransTec.
They also face complaints over how they dealt with the company’s audit committee and its management.
The JDS’ actions follow a damning department of trade report in October 2003, which criticised auditors and executives at TransTec.
PwC responded this week in a statement: ‘As with last year’s DTI inspectors’ report, PwC profoundly disagrees with and rejects the complaints made by the executive counsel to the JDS. We stand by our people and will vigorously defend our work.’
Robinson, a Treasury minister until 1998, was chairman and chief executive of TransTec from 1991 until 1994. He stepped down as CEO, but continued as non-executive chairman until 1997 when he entered government.
TransTec went into administration in December 1999 after it emerged it had agreed to pay £11m in compensation to auto giant Ford for failing to fulfil an order for cylinder heads.
Of the sum agreed with Ford, £5.8m was booked as a write-off of tooling, while £1.9m was capitalised as tooling. The remaining £3.6m was not provided for.
Last year’s DTI report blamed chief executive Richard Carr and FD Bill Jeffrey for failing to disclose the Ford settlement. But criticism was also levelled at the auditors: ‘The failures in PwC’s audit of TransTec were not failures of technical competence but rather of will – a lack of robustness and strength of purpose,’ it said.