Funny how disciplinary rulings come along like buses. First comes the unhappy saga of Versailles, and its auditor, Nunn Hayward. A week later, we were treated to a demolition job on Queens Moat Houses and auditor Bird Luckin.
In each case, a tiny firm became dangerously over-reliant on a single client. That can’t be healthy at the best of times – when shareholders are involved, it should set the alarms ringing. But as is so often the case, City analysts did not seem to notice.
In the case of Versailles, and its charismatic founder Carl Cushnie, sentenced this week for defrauding investors, steps were in hand to replace Nunn Hayward with a mid-tier firm. It was too little, too late, and the subsequent Joint Disciplinary Scheme investigation, led by executive counsel Chris Dickson, pulled no punches.
Nunn Hayward was severely reprimanded and ordered to pay £125,000 in fines and costs, while Tom Dales, the engagement partner, was excluded from ICAEW membership. Curiously enough, the firm’s website makes no reference to this shameful episode, instead trumpeting the slogan: ‘People profit from our experience.’
Bird Luckin is just as bad, describing itself as ‘a unique firm of accountants who can help you maximise that business potential’. It has just been severely reprimanded by the JDS for signing off a £90m profit that was really a £56m loss.
Some things are just bad luck. Stoy Hayward had a run of disasters in the late eighties with clients such as Roger Levitt (disgraced), Asil Nadir (ran away) and Sock Shop (went bust). But the firm managed to reinvent itself.
Nunn Hayward and Bird Luckin have learnt their lesson. But they’ve done the profession no favours.