PracticeConsulting£10m Maxwell report slams auditors

£10m Maxwell report slams auditors

The DTI report on the Maxwell affair has finally been published, severely criticising a number of City institutions including Coopers & Lybrand Deloitte.

Commissioned in 1992, it cost £10m to produce and comes in at over 700 pages.The report details what happened, when it happened and who should burden the responsibility.

The report said: ‘The practices in the pension funds which we have identified were known to Coopers & Lybrand Deloitte.

‘They and other professional advisers and houses were closely involved with the directors of Mirror Group Newspapers in preparing Mirror Group Newspapers for flotation: all these bear responsibilities for the failure to make Mirror Group Newspapers suitable for listing and the inaccuracies in the prospectus.’

A spokesman for PwC said the firm accepted the criticism, adding they had clearly fallen short of their own high standards, which they regretted.

He said the report would act as a constant reminder to staff of the need to be vigilant, adding that since the scandal ten years ago they had learnt lessons and made amendments to their procedures.

But he added that the firm had been the subject of a deliberate deceit.The inspectors make eight recommendations, including the need to address ‘issues relating to auditor independence with a view to maintaining public confidence in the audit and discouraging a firm which provides audit services to a company from acting as reporting accountants on that company’.

The report concludes by saying: ‘The most important lesson from all the events is that high ethical and professional standards must always be put before commercial advantage.’

Links

The Maxwell report – menu page

Maxwell report calls for audit rotation
Compulsory rotation of partners or firms undertaking audits have been recommended by the government report into the Maxwell affair, which recommends ‘more radical thought and wider debate’ on auditor independence in the UK.

Press baron damned as early as 1973
The latest report on the Maxwell scandal echoes many of the same conclusions as a DTI report on the former press baron that was published almost 30 years ago.

Coopers’ pensions role under fire
Coopers & Lybrand Deloitte consistently agreed accounting treatments of transactions that served the interest of Robert Maxwell rather than those of the pension beneficiaries, according to the DTI’s report into the Maxwell affair.

Report recommends ‘comfort letter’
A company combining the posts of chairman and chief executive which is seeking a listing, should provide a ‘comfort letter’ explaining why two top jobs have been given to one person, according to a the report into Mirror Group Newspapers.

Non-audit services ‘conflict of interest’
Auditors providing non-audit work for the same company have an ‘obvious’ conflict of interest, according to the Department of Trade and Industry’s report into the Maxwell affair.

Leader: Maxwell’s ghost returns, but has lesson been learnt?
The ghost of Maxwell has returned once again to batter PricewaterhouseCoopers with negative headlines over Coopers & Lybrand Deloitte’s failings as auditor of the corrupt media empire.

Timeline: The Maxwell scandal

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