Deloitte could face tax probe over MG Rover accounts
FRC likely to launch inquiry into MG Rover auditors Deloitte over possible tax avoidance
The Financial Reporting Council is likely to launch an inquiry into MG Rover’s auditors Deloitte, amid concerns over possible tax avoidance at the collapsed car manufacturer.
Link: Examining the wreckage of the Rover crash
The Big Four firm has audited all MG Rover’s accounts, however, The Times reports that the Accountancy Investigation and Discipline Board is believed to be concerned about tax avoidance across MG Rover’s complex corporate structure, and about fees paid to Deloitte for additional services.
The FRC expressed concerns over the Midlands car maker’s accounts in its report to the DTI that led Alan Johnson, the Trade and Industry Secretary, to launch an independent investigation.
Deloitte received a number of payments for services additional to auditing from MG Rover. In 2002 it was paid a total of £3.5m in addition to its £500,000 audit fees.
Last week, it was announced that PricewaterhouseCoopers, MG Rover’s administrators, had been paid £4m for two months’ work.