Deloitte praised but Rover probe motors on
Report clears audit by Deloitte but AADB still looking into firm's work with former car giant
Deloitte’s audit work has been given a clean bill of health in BDO Stoy
Hayward’s report into the collapse of MG Rover, but there is still fallout from
the collapse of the failed manufacturer.
The firm is not yet in the clear with accountancy’s watchdogs over its work
at the car maker and the profession could even face a revamp of the work it
undertakes with clients.
In the report, elements of Deloitte’s corporate finance advice to MG Rover
directors “the Phoenix Four” came under the spotlight of BDO Stoy Hayward
investigators.
Deloitte was criticised for working with a BMW director who was potentially
involved in MG Rover’s bid for its loan book, when BMW itself was disposing the
book.
However, Deloitte’s audits for MG Rover were “well planned and executed”, the
investigators found.
The profession’s overseer the FRC has been tasked by Lord Mandelson to decide
whether audit or accounting standards and guidance need to be altered to ensure
greater transparency about the decisions directors make in the context of a
company’s financial health.
The FRC said it had kicked off its consideration of the inspectors’ report
and would “announce in due course the actions it proposes”.
FRC sub-division the Accountancy and Actuarial Discipline Board is still
conducting its own probe into Deloitte’s role at MG Rover, which kicked off in
August 2005. It will also consider the findings before deciding how to proceed.
Deloitte said in a statement: “The inspector’s report confirms that our work
delivered very significant value to the group, that our audit opinions were
appropriate and that responsibility for managing the group’s affairs and the
level of remuneration rested with the directors.”
