Big Five - D&T 'failed to spot forgeries'
Deloitte & Touche is facing a claim of up to #500,000 from two insurance businesses which say the firm failed to spot a series of thefts by a company accountant over a five-year period.
Allied Underwriting Agencies Ltd and Cedar Insurance Co Ltd are suing Spicer and Oppenheim, Touche Ross and Co and Deloitte & Touche for failing to detect the thefts.
All three firms are now part of Deloitte & Touche.
In a writ still to be served on Deloittes, the insurers say the firm was guilty of negligence and breach of contract as auditors. They are also suing over the statutory audits carried out by Spicer and Oppenheim for 1989, and by Touche Ross and Co for the years 1990 to 1994.
In particular, the two companies are suing over the breaches of contract and negligence of the firms in failing to warn, detect and report to the companies’ directors, and to qualify the companies’ accounts as a result of thefts and forged cheques carried by the companies’ former accountant Alfred John McPhillips.
Phillips stole money during his work for the companies between May 1988 and March 1996, according to the High Court writ.