Deloitte & Touche (D&T) is facing the loss of millions of pounds in revenue after a ruling by the US Securities & Exchange Commission (SEC) over conflicts of interest arising from its audit of Microsoft.
Accountancy Age has learned that the watchdog has told the Big Five firm, which is the third largest Great Plains reseller worldwide, that it must stop selling software following Great Plains’ $1.1bn acquisition by Microsoft, completed earlier this month.
SEC officials ruled that the acquisition had created a conflict of interest as D&T, which has sold the software for three years, has also been Microsoft’s auditor for two years.
But D&T partner Paul Botha said that, despite the decision, the firm would continue to provide IT support and would be looking for third parties to sell the software. Botha added: “Contrary to what many people believe, D&T is not pulling out of the market. But we will be redefining our position.”
The move has demonstrated the SEC’s determination to maintain authority despite not having had a permanent chairman since Arthur Levitt resigned in February. It also demonstrated that it is willing to play tough despite the appointment of George Bush as President.
A spokeswoman for Microsoft in the UK told Accountancy Age: “As far as Microsoft is concerned D&T has been, and will continue to be, a strategic partner with Great Plains and Microsoft business solutions.”
An official SEC statement said: “We haven’t released any public statement about the case so, according to SEC policy, we have no comment and neither confirm nor deny the existence or non-existence of any proceedings.”
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