EDDC’s auditors say they aren’t there to detect fraud:
“The former auditor of the collapsed cake chain Patisserie Valerie has argued that it is not the role of accountants to uncover fraud.
Grant Thornton is under investigation for its audits of the chain that collapsed into administration earlier this month following the discovery of a £40m black hole in its accounts. Patisserie Valerie’s former finance director has been arrested on suspicion of fraud.
David Dunckley, chief executive of Grant Thornton, which was replaced by RSM as the chain’s auditor in mid-January, told MPs on the business, energy and industrial strategy committee that there was an “expectation gap” that “needs to be fixed”.
“We’re not looking for fraud, we’re not looking at the future, we’re not giving a statement that the accounts are correct,” he said, adding that his firm audits 7,000 companies. “We are saying [the accounts are] reasonable, we are looking in the past and we are not set up to look for fraud.”
In a heated exchange with Rachel Reeves, the Labour MP and committee chair, Dunckley reiterated: “If people are colluding and there is a sophisticated fraud that may not be caught by normal audit procedures.”
He said in an ideal world it would be spotted. Reeves replied: “But in a shop that sells tea and cakes, you’d sort of think that might be spotted. It’s not a multinational complex organisation. …”
and it seems, even when they DO detect major fraud, they don’t seem to feel obliged to do anything about it:
“Deloitte has been fined 2.2m ringgitt (£415,000) by Malaysian regulators for failures in its audit of a firm linked to the scandal-ridden state fund, 1MDB.
The Securities Commission Malaysia said Deloitte was reprimanded because it failed to report the irregularities detected in the Sukuk Murabahah Programme, an Islamic bond issued by Bandar Malaysia Sdn Bhd (BMSB).
Deloitte was the statutory auditor for BMSB and its holding company 1Malaysia Development Berhad Real Estate (a subsidiary of state fund 1MDB) for the financial years ending March 2015 and 2016 when the bonds were issued.
The securities regulator said Deloitte’s failure to immediately report irregularities may have a material effect on the ability of BMSB to fulfil its obligations in repaying sukuk holders any amount under the programme.
Imposing a fine of 2.2m ringgit , the regulator said it “finds the breaches committed by Deloitte serious in nature as it has failed to discharge its statutory obligations”.
East Devon Watch 