According to the Financial Times the two Big Four firms looked likely to escape any involvement in the inquiry because oil reserve are neither balance-sheet items, nor form part of the independent annual audit.
But an internal report prepared for Shell by law firm Davis Polk & Wardwell said internal control problems were at the heart of the 20 billion barrels overstatement which shook the company to the core and which saw a report on BBC’s newsnight question whether this was becoming ‘Britain’s Enron’.
They are now likely to be questioned by the Securities & Exchange Commission over how they divided up responsibilities.
Independent auditors must verify that a company’s internal controls are adequate and provide numbers that can be used in an outside audit.
These requirements have become more stringent with the introduction of Sarbanes-Oxley.
Such controls ensure that financial reporting is reliable and also verify the effectiveness and efficiency of operations, and compliance with laws and regulations.
The report also questions the controls within the finance department, run by chief financial officer Judy Boynton until her resignation early this week
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned