AIDB drops invoicing charges against PricewaterhouseCoopers
AIDB drops complaint this week that firm should have conducted a 'walk-through' procedural test on the invoicing process of Mayflower subsidiary Transbus
PricewaterhouseCoopers is in the clear over charges that it knew and failed
to stop an unusual invoicing practice at collapsed bus manufacturer Mayflower,
after the Accountancy Investigation Discipline Board dropped the complaint.
The UK’s largest audit firm was facing complaints from the AIDB over its
audit of the company, which collapsed amidst suggestions of a £20m accounting
black hole.
The AIDB dropped the complaint this week that the firm should have conducted
a ‘walk-through’ procedural test on the invoicing process of Mayflower
subsidiary Transbus.
The subsidiary had been holding back cash from its banks in order to prop up
the company’s ailing cashflow, according to regulators.
The dropping of the complaint follows on the heels of the panel’s dismissal
of charges of dishonesty levelled at Transbus’s former financial controller Ian
Shelton. On Monday, the panel dismissed those complaints, which had revolved
around suggestions that Shelton kept quiet about the invoicing practices.
PwC had also been accused of failing to express concern as to Mayflower’s
ability to continue as a going concern in relation to its 2002 accounts, a
complaint that is ongoing.
Various indicators, including suggestions that the banks would not renew
lending facilities to the company, should have persuaded the firm to include
warnings in its audit report, the tribunal has been told.
The tribunal is the first public outing for the AIDB, and the first time any
firm has seen complaints heard publicly. Under the regulatory regime run by the
Joint Disciplinary Scheme, private tribunals were followed by public reports.
AIDB executive counsel Cameron Scott is also currently investigating the
behaviour of Deloitte in its auditing of MG Rover. The body, part of the
Financial Reporting Council, regulates qualified accountants, and has the power
to issue fines and to disqualify people from the profession.
Mayflower FD David Donnelly is also accused of failing to inform PwC and the
Mayflower board of dire shortfalls which existed at the Falkirk premises of the
business.
Both PwC and Donnelly deny the complaints. The case continues.