Deloitte & Touche defended itself on Wednesday from criticism it failed to detect profit overstatements at retailer Ahold, saying it stood defenceless in the face of deliberate deception.
“Accountants have no chance in the face of deliberate collusion. You cannot detect fraud it there are no traces… Last year there were no traces of fraud,” Jan Dalhuisen, an executive board member at the accountancy firm's Dutch unit told a news conference.
Dutch retailer Ahold, a former icon of stability and double-digit profit growth, shocked investors with a one billion euro hole in its accounts in February. It had to restate earnings for 2000, 2001 and 2002 interim results after Deloitte & Touche suspended auditing as irregularities were uncovered.
The Netherlands is in the process of hammering out a code on corporate governance, due to be finalised in January, with parts to be enshrined in law.
U.S. corporate governance reforms had resulted in a 15 percent rise in auditing hours at Deloitte, but will not necessarily lead to a similar sales rise, its chairman for the Netherlands said.
“We booked 15 percent more hours on jobs related to the U.S. Sarbanes-Oxley act (against corporate fraud) and I think we will see the same development in the Netherlands,” said Willy Biewinga, chairman of the Big Four accounting firm's Dutch business, at a presentation of the unit's annual results.
He said that fierce competition from rivals PricewaterhouseCoopers, KPMG and Ernst & Young meant that the increase in hours would not per se translate into higher sales.
Deloitte Netherlands reported a rise in 2002/2003 sales of 24 percent to 749 million euros ($858.8 million) on the back of autonomous growth and the acquisition of Andersen Netherlands in June last year.