A fifth of the Financial Reporting Review Panel’s total staff count will be tasked with looking at MG Rover’s accounting policies, should a formal inquiry go ahead.
While staff at the 25-person panel have been looking into the company’s accounts for the past two weeks, no formal investigation has begun.
Paul Boyle, chief executive of the FRC, said the FRRP would be ‘reading the accounts from page 1 to page X’, but refused to be drawn on specifics. Should the FRRP’s preliminary investigation bring any accounting concerns to light, it will set up a formal inquiry team.
The FRRP investigation is just one source of information for the DTI. Under insolvency law, PricewaterhouseCoopers must also report any suspicious activity it encounters during its work in winding up the company.
Although Boyle would not comment on the specifics of the investigation, accounting experts have pointed to the notoriously difficult method of accounting for negative goodwill as being an area of interest that could explain the widely reported – but unproven – mismatch in the accounts.
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