Maxwell's ghost returns, but has lesson been learnt?

As details of the Department of Trade and Industry’s report are leaked slowly and painfully ahead of its impending publication, one cannot help feeling a twinge of sympathy for the firm.

The Maxwell affair took place a decade ago, and the firm is now a different beast – not just because it merged with Price Waterhouse, but because of the improvements in its internal and audit quality controls since the Maxwell days. But despite this, the firm is still plagued by the issue of auditor independence.

Still reeling from a savaging by the Securities and Exchange Commission in the US, it is now embroiled in controversy over its invitation to take on an assignment for Russia’s biggest company, Gazprom, which is likely to include checking facts and figures it has already audited.

Concerned investors made a point of saying they do not doubt PwC’s professionalism, but argue there is a clear conflict of interest issue.

The moral is that auditors need to be more than independent – they need to be seen to be so.

Leaks show it’s answers time

Talking of Maxwell, the DTI last week took the unusual step of issuing a statement condemning the leaks of its report on Maxwell to the press.

It said it was deplorable that witnesses, who had been sent the draft report in confidence, might have revealed its contents.

That’s as maybe, but it is by no means certain it was a witness who leaked; after all, if the reports are to be believed, none of the advisers will come out of this investigation smelling of roses and would perhaps want to keep quiet rather than see their names splashed across the papers.

To date, only partners of Coopers & Lybrand Deloitte have been publicly rapped across the knuckles, but there are many others in the firing line.

Many, including the Mirror pensioners, are frustrated at the apparent delay in the ‘naming and shaming’ process. Again, this comes down to transparency – until the report is published there will still be huge question marks hanging over all those that worked with Cap’n Bob. It is ten years since Maxwell went overboard – and still there are many unanswered questions.

It was inevitable that this vacuum of information would be filled – if the DTI had moved faster we would not have to rely on leaks to get at the truth.