February 28, 2021

Deloitte’s Audits of SIG Under U.K. Regulator’s Microscope

The Financial Reporting Council, the U.K.’s audit watchdog, is calling, is calling, is calling out Deloitte’s name in a probe of the Green Dots’ 2015 and 2016 audits of building products distributor SIG, according to several publications across the pond.

From the Financial Times:

SIG said in February it had discovered misstatements after a whistleblowing allegation about irregularities at its core UK business.

The errors meant SIG’s full-year profits for 2016 were overstated by £3.7m, with a further £2.5m overstatement in the first half of 2017 and £400,000 overstatements related to previous years.

The investigation will focus on the audit of cash and supplier rebates, both Accountancy Age and Reuters reported.

Deloitte said in a statement that it would “co-operate fully” with the investigation, according to the Financial Times.

The statement goes on to say:

“Quality is integral to our audit work and we are committed to continued improvement in audit quality through investments we’ve been making and programmes we have in place.”

SIG initially said it intended to restate its previous accounts working closely with Deloitte, but 78% of SIG investors voted against the reappointment of Deloitte as the company’s auditor in May, according to Accountancy Age.

The discovery of accounting irregularities led to several SIG staff members being suspended.

All the Big 4 firms in the United Kingdom, most notably KPMG, have been under fire by the FRC for their decline in audit quality. The audit regulator singled out KPMG a couple weeks ago for its poor audit work, calling it “unacceptable,” after an FRC review of 16 audits carried out on firms in the Financial Times Stock Exchange 350 index revealed that half of KPMG’s audits required some or significant improvement.

[FT] [AA] [Reuters]

Image: Wikimedia Commons/Rayhonso

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Related articles

Talent-Strapped PwC Is That Desperate Ex Texting You With ‘WYD’ After You’ve Moved On

Leaving public accounting is rarely an easy decision, even when the choices are “stay or have a crippling nervous breakdown.” It’s not that the decision itself is hard, rather the consequences of taking an oftentimes necessary leap can lead to difficulties in securing subsequent employment if, as your accounting professors would have you believe, walking […]

Big 4 Lawsuits: Mauro Botta vs. PwC and VBS Mutual Bank Liquidators vs. KPMG

PwC ‘Punished’ Thorough Auditing, Whistleblower Testifies [Law360] A couple Augusts ago, Adrienne wrote about an academic study that revealed the market for audit services penalizes audit firms for disclosing information critical of management in their audit opinions and that audit firms that find internal control material weaknesses experience lower client and fee growth. In other […]