Accountants in hot water here at home and across the pond

Industry news roundup: week ended 16 Jan 2014:

This week, the news is simply full of stories about British accountants finding themselves landing in hot water both here and in the US.

First up is the story that just broke recently concerning how Deloitte is most likely going to be raked over some hot coals concerning the rather glaring  £200 million accounting hole that RSA ended up with. Deloitte was the auditor for the insurer, and the Chartered Accountants Regulatory Board is currently investigating the matter in partnership with the Central Bank of Ireland and the UK’s Financial Reporting Council, all of which are keen to discover just how Deloitte missed the massive error.

Deloitte of course is busily tap-dancing around the pending investigations, taking pains to say it hasn’t seen any reports concerning the accounting shortfall. I don’t know about you but that sounds a lot to me like the accounting firm is relying upon plausible deniability at this point.

Speaking of denials, American electronics manufacturer HP has thrown out the denials by soon-to-be-disgraced Autonomy founder Mike Lynch put forward concerning the alleged unlawful accounting of the company after a buyout. Lynch tried to pass off the problem as HP’s for not understanding international accounting rules very clearly, a statement that HP more or less scoffed at considering how completely ridiculous it was.

I don’t know about you but it sounds like to me that Mike Lynch has some serious bollocks to try to weasel out of this huge accounting mishap by simply blaming HP on making accounting errors. Now he hasn’t had his day in court yet – which means his guilt hasn’t been proven of course – but the evidence that’s emerged so far has been pretty damning and most industry experts believe that he’s going to get the book thrown at him, which makes this weak and rather silly attempt to shift blame look rather cowardly to me.

Come on, Mike! Take your lumps like a man. What’s the worst that could happen? Oh, yes I suppose you could end up facing jail time in a situation like this. Oh well – maybre next time you won’t try to pull the wool over the eyes of a major multinational software firm, you bloody idiot!

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