PracticeConsultingPwC and E&Y face audit probe

PwC and E&Y face audit probe

Multimillion pound accounting irregularities at the Chicago-based distributor of UK musical group Boosey & Hawkes has sparked a probe by Big Five investigators into audit work by Ernst & Young and PricewaterhouseCoopers.

The UK instrument maker and music publisher this month called in an unnamed Big Five firm after auditor E&Y completed its report into the US subsidiary’s loss of control, which forced the group to make a £11.9m write-down on top of a £3.5m bad debt provision in September’s interim results.

Now both E&Y and PwC – which lost its audit work to its rival in 1998 – could face the prospect of legal action for failing to spot ‘fundamentally incorrect and highly misleading accounting entries over several years’.

Irregularities included errors in stock entries, pre-payments and the need for provisioning further debt.

Boosey, who published 40 works performed at this year’s BBC proms, is also considering taking legal action against the dismissed president and chief financial officer.

Chartered accountant group and chief executive Richard Holland said investigators had been called in ‘to review the group’s means of redress against all parties involved’.

Peter Austen resigned as group FD in May, and was replaced in September by John Christmas, described by Holland as an appointment ‘to improve controls within the group’ that now faces end of year losses.

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer