FRC under pressure to deliver on iSoft
Financial Reporting Council yet to reveal its hand over investigation into iSoft
Pressure on the Financial Reporting Council to investigate the crisis at
iSoft increased this week, as the company announced a £174m revision to stated
figures and the Financial Services Authority upstaged the accounting regulator
in intervening.
The company, a key NHS contractor, re-stated three years of results last
Friday, showing a loss of £382m for the year ended April 2006, and admitting
that £174m had been recognised too early.of qualified FDs at the helm of every
department
The group’s accounts are in limbo after Deloitte declined to sign off the
numbers and regulators sniffed around the company.
The FSA is investigating the group, iSoft admitted last week. But the
Financial Reporting Council has yet to declare its hand. Both the Financial
Reporting Review Panel, which regulates company accounts, and the Accountancy
Investigation and Discipline Board, which regulates qualified accountants and
firms, could potentially intervene.
A spokeswoman at the FRRP would neither confirm nor deny whether the
organisation would investigate iSoft. It does not normally publicly disclose
investigations.
Reports suggested the AIDB would consider whether to investigate over the
next few weeks.
The FSA’s investigation is thought to be looking at iSoft ‘issuing
potentially misleading statements to the market’.
FSA spokesman David Cliffe said: ‘All we’ve done is confirm that we’re
investigating the company. Our concern with listed companies would be how they
keep markets updated and in some circumstances this could flow from how a
company announces information.’
A lawyer familiar with such investigations said it was unusual for the FSA to
be investigating. ‘I would expect that role to have been filled by either the
FRRP or the DTI,’ the source said.
Though bankers announced their continuing support for iSoft this week, there
was concern that Deloitte was unable to say whether the financial statements
issued give a true and fair view of the accounts.
In the last month, the company confirmed that a provisional inquiry by
Deloitte unearthed accounting irregularities for its 2004 and 2005 accounts. The
events in recent months were triggered by the need to issue a trading statement
in January 2006, warning of a sharp reduction in revenues and profits for the
year-end 2006.