PwC to investigate accounting irregularities at IT business

ACCOUNTING IRREGULARITIES have been discovered at online technology business Phoenix IT, which has called in PwC to conduct an independent investigation into the books.

A statement said that it discovered a mis-statement of a number of accounting balances following organisational changes in its finance function, and a number of internal reviews.

However, the company claims the irregularities are limited to its subsidiary Servo which it acquired in 2006.

“The information currently available suggests that certain control processes within the finance function at Servo Limited’s Birstall site in Leeds have been repeatedly and deliberately circumvented,” the statement said.

Following the discovery, a manager in the Birstall finance function has been suspended and a business review is underway.

PwC and legal firm Nabarro will conduct an independent forensic investigation. However, no timeframe of when that investigation is due to end has been given.

The company estimates that the impact of correcting the mis-statement of accounts would lower its assets by up to £14m on a post-tax basis.

Phoenix IT hopes to report an adjustment to the financial statements in the group’s half-year results, expected in November. 

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