Deloitte investigated over MG Rover audit
Big Four firm faces AIDB probe over audit of car manufacturer's accounts and provision of advisory services
Accounting’s watchdog is to launch an investigation into Big Four firm
Deloitte over its role as auditor of collapsed car manufacturer MG Rover.
The Accountancy Investigation and Discipline Board, part of the Financial
Reporting Council, announced today that it would be looking into the actions of
Deloitte in relation to its audit of the 2003 accounts of the company and its
parent Phoenix Venture Holdings, as well as other advisory services that were
provided.
It is thought that the AIDB is concerned about tax avoidance across MG
Rover’s complex corporate structure, and about fees paid to Deloitte for
additional services.
The FRC had already expressed concerns over the Midlands car maker’s accounts
in its report to the DTI, which led Alan Johnson, the Trade and Industry
Secretary, to launch an independent investigation.
The statement in full from the AIDB reads:
‘The AIDB has decided to investigate the conduct of Deloitte & Touche LLP
as auditors and advisers to the MG Rover Group. Initially, the investigation
will focus on the audits of the 2003 accounts of MG Rover Group Limited and its
ultimate parent company, Phoenix Venture Holdings Limited and certain non-audit
services provided by Deloitte & Touche to the Group.
‘This decision was taken following consultation with the ICAEW (the
professional body of which Deloitte & Touche is a member firm), which has
agreed that the matter should be investigated by the AIDB.’