A CUT in the record fine dished out to Deloitte appears a possibility, after the firm succeeded at a tribunal appeal hearing in ovetrturning eight of 13 charges made against it in the MG Rover case.
The firm and its partner Maghsoud Einollahi had been fined £14m and £250,000 respectively, after a tribunal found they had failed to adequately consider the public interest and mitigate risk of conflict in advising the owners of MG Rover in two transactions, known as Project Platinum and Project Aircraft.
The appeal upheld several findings in relation to Project Platinum but granted other findings, including those related to Project Aircraft. In total, eight of the original 13 findings were overturned.
Paul George, executive director, conduct, at the FRC, said: “The FRC welcomes the Appeal Tribunal’s decision that there were some significant issues of misconduct in this case concerning the need for accountants to act with objectivity. Firms should identify who the client is at as early a stage as possible so that any conflicts of interests can be addressed.”
The tribunal also criticised the ICAEW, saying that there was a lack of clarity in the institute’s guidance for accountants on how they should act in the public interest.
ICAEW chief executive Michael Izza said: “Today’s ruling suggests there needs to be greater clarity for the accountancy profession with regard to its public interest responsibilities. We need to work through the detail of the tribunal’s ruling before coming to any firm conclusions.”
A spokesman for Deloitte UK said the firm was “pleased” that findings of failing adequately to consider the public interest and deliberate serious misconduct were overturned.
“We take such responsibilities extremely seriously and these findings were entirely unreflective of the integrity and values of our firm,” said the spokesman in a statement. “However, we accept the tribunal’s findings that aspects of our client engagement processes could have been better.
“As part of the continuous review of our internal guidelines, which have been strengthened regularly in the 14 years since this project, we will consider whether any further action is required.”
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