Accountancy Age wins right to report fraud investigation

By Alyson Fixter

Accountancy Age has won a High Court battle to be allowed to report
on an investigation into top accounting firm Deloitte & Touche.

The VNU title was gagged from publishing the findings of the senior
industry watchdog, the Joint Disciplinary Scheme (JDS), in February
after Deloitte filed a last-minute interim injunction against the
magazine.

But in a High Court hearing last Friday, a judge
rejected Deloitte’s request for a permanent injunction, which the
company had filed on the basis that the story would cause “serious and
irreparable harm” to the business.

The magazine is now free to
report that the JDS has laid official complaints against Deloitte over
its auditing of casino company Capital Corporation in the mid-1990s.

The
complaints, which relate to the allegedly fraudulent behaviour of a
Deloitte partner who was working on the case, and “misleading” market
statements made by Capital, will now be fully investigated by a JDS
tribunal.

Editor Damian Wild said: “We always had confidence in the merits of our case.

“If
the accountancy profession is to be seen to be transparent and
accountable in the eyes of the public, it needs a robust, independent
watchdog that can act without outside interference.

“We strongly
believed that if this injunction were allowed to stand, it would do
lasting damage to the profession’s reputation. We are delighted that
the judge agreed.”The complaints, which will be published in the next
issue of the magazine and distributed by press release by the JDS, come
in three parts, and include criticism of Deloitte for not reporting the
actions of one its senior auditors, who the JDS believes “fraudulently
obtained” a Range Rover from Capital.

But a Deloitte spokeswoman said she believed the JDS would not uphold the complaints at the tribunal.

She
added: “After a five-year JDS investigation, no complaint has been laid
in respect of the audits of the financial statements of Capital
Corporation.

“We therefore objected to having unsubstantiated and
groundless allegations aired in public before even the commencement of
the tribunal process.”

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