Firm caught up in Wales Audit Office probe
KTS Owens Thomas signed off on WAO accounts that contained "significant deficiencies", according to Welsh auditor general
A WELSH ACCOUNTANCY FIRM has been caught up in a review which found serious errors in the accounts of the Wales Audit Office (WAO).
The review by the National Audit Office found the WAO’s accounts had not been prepared within the applicable financial reporting framework since 2005/2006. In particular, the failure to recognise ongoing liabilities in full had “impacted significantly” on the WAO’s ability to perform its tasks.
A separate report commissioned by Huw Vaughan Thomas, the auditor general for Wales, found the WAO had misstated its financial position in its 2009/2010 accounts, were deficient in some aspects of presentation and showed weaknesses in policy and practice. His report was requested by the Welsh Assembly’s Public Accounts Committee.
Vaughan Thomas noted that the Cardiff-based accountancy firm which audited the accounts, KTS Owens Thomas, had issued unqualified audit opinions on the annual accounts every year, despite the NAO review identifying serious deficiencies in the WAO accounts.
“…I am deeply concerned that they did not bring what must be considered significant audit judgments to the attention of the interim auditor general, to members of the audit and risk management committee, or indeed to the chair of the Public Accounts Committee,” stated Vaughan Thomas in his letter.
The letter also stated that KTS Owens Thomas asserted that its accounting treatment was “correct”.
KTS Owens Thomas declined to comment when contacted by Accountancy Age.
“The discovery of failures of integrity at the top of the [Wales Audit Office], and of the weakness in the governance and the management arrangements of the Wales Audit Office has been a blow to the morale of hard-working and highly committed staff and has left a legacy of anxiety in the organization,” Vaughan Thomas also wrote in the letter to the PAC.
He added: “For the immediate future the greatest boost to staff morale [at the WAO] will undoubtedly come from drawing a firm line under these events. I know that my staff and both unions are keen that Wales Audit Office should now concentrate on delivering quality work that is clearly founded in appropriate levels of accountability and openness.”
KTS Owens Thomas has more than 80 professionals, advising clients in south Wales.