It is the first major disciplinary finding against one of the 'big
four' accountancy firms - PwC, Deloitte, EY and KPMG - since CARB was
established in 2007.
In a finding published on CARB's website, the
regulator says Deloitte "failed to demonstrate the adequacy and
sufficiency of the audit work performed to support its audit opinion and
is accordingly
liable to disciplinary action" in relation to dealings
with a client company.
The punishment consists of a €20,000 fine,
€21,000 in costs, the reprimand and being named in Accountancy Ireland
magazine next month.
Deloitte told the Sunday Independent that it
"takes any findings of CARB extremely seriously and co-operated fully
with CARB to resolve this matter. Audit quality is the firm's highest
priority."
It said the issue related to a company whose former
managing director was later disqualified from acting as a company
director by the High Court, adding: "Deloitte has consented to this
order (relating to audit documentation) as the issues occurred over a
decade ago."
The Sunday Independent understands that the issues related to Lapple Ireland, a subsidiary of a German toolmaker.
MD
John Slattery was disqualified by the High Court because of accounting
irregularities "substantially caused by the manual substitution of
incorrect figures over a number of years," according to a statement
posted on the website of the Office of the Director of Corporate
Enforcement. (ODCE).
The statement says Mr Slattery acknowledged
responsibility for the errors and accepted that instead of trying to
work through an "inherited problem" he should have asked for an internal
audit.
He apologised that his conduct had necessitated the bringing of the application from the ODCE
"Here,
published company financial statements over a number of years seriously
misstated the true state of affairs at Lapple Ireland," the statement
reads.
"Directors, senior managers and internal auditors, as well
as company external auditors, each have a critical role to play in
regularly validating the adequacy of company financial-control systems
and in detecting and reporting on failures and behaviours which are
causing serious error. There can be no tolerance of company
documentation which is inaccurate and serves to mislead stakeholders on a
company's financial performance".
Lapple Ireland closed its Carlow factory in 2007 after 30 years in this country.
A
CARB inquiry into KPMG's role as auditors of Michael Fingleton's Irish
Nationwide was deferred until after the Banking Inquiry's conclusion. A
probe into EY's role as auditors of Anglo Irish Bank was postponed until
after the DPP has completed its investigations of the bank.