Ex-Andersen partners fined over Wickes
Two former Andersen partners have been fined £25,000 each for their role in the fraud at DIY chain Wickes during the mid-nineties.
Link: Ex-Wickes exec cleared of misleading auditors
The fines, handed down by the Accountants’ Joint Disciplinary Scheme today, were accompanied by a £400,000 fine handed to Andersen. The former Big Five firm was also ordered to pay costs of £700,000.
The two Andersen partners, Richard John Simmonds and David John Ludlow Whitmore, ‘carried the ultimate responsibility within Andersen for the conduct of the audits‘.
The fraud centred around Wickes’ accounts for the years 1992 through 1994 including information on rebates from its suppliers. The rebates were represented as unconditional when many depended on a number of factors with suppliers, such as volume targets being reached.
This, claimed the JDS, was ‘fraud’ aimed at misleading ‘shareholders, the auditor and the market about the true performance and value’ of the DIY chain.
In each year from 1992 to 1995, the value of the rebates booked in the accounts actually exceeded group operating profits, highlighting the extent of the fraud that occurred.
Wickes’ restated its accounts in 1995 from a £36.7m profit to a £9.9m loss.