Oh look, more accountancy firms landing in hot water!

Industry news roundup: week ended 23 Jan 2014:

This week marks just another one where industry watchdogs have been simply going wild by ripping apart the actions of accountancy firms for wrongdoing.

Is it just me, or has there been a flurry of activity when it comes to rooting out supposed bad behaviour on the part of British accounting firms? For instance, the Financial Reporting Council recently announced formal investigative proceedings into the £1.5 billion in capital that seems to have mysteriously vanished from the Co-operative Bank’s coffers. Well, more specifically they’re investigating KPMG for its role as Co-op Bank’s auditor – an auditor that surprisingly gave the bank a clean bill of health shortly before the shortfall was discovered.

In its defense, KPMG has released a statement that says it was completely blameless for the massive mishap, claiming that its audit of Co-op was ‘robust’ and that it met any and all relevant standards. Of course that’s just the accounting firm’s opinion – and one that might not be worth much at all if the FRC finds that KPMG had been sweeping things under the carpet!

Meanwhile it’s not just large firms that have gotten themselves in trouble. In fact, the former director of now defunct Glasgow based Datadesk Computer Services Ltd has been found to have the accounting ability of a dead codfish by the Insolvency Service, has been slapped with a seven year ban from heading up any other companies he’d like to run into the ground.

Datadesk was liquidated in February of 2012 with a massive £134,000 tax bill. It had no assets at the time it was shuttered. Datadesk had begun to founder shortly before its liquidation, and the director tried his best to diversify his interests – but his record keeping was so abysmal that the Insolvency Service couldn’t verify a £312,000 in payments the company made were for its benefit. Records were so sparse that there was no way of determining if there was even more wrongdoing on the part of the director, which is why the Insolvency Service threw the book at him.

If you ask me, this director was either grossly incompetent or massively duplicitous. I’m glad the Insolvency Service slapped him with a seven year ban, the lousy git. I hope he’s learnt his lesson!

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