Accounting giant Deloitte, together with two of its partners and one other external auditor to the former Semple Cochrane – the Paisley engineering firm that was bailed out in 2000 after it admitted overstating its profits – have been sent to a disciplinary tribunal of the Institute of Chartered Accountants of Scotland.
When the accounting scandal emerged, the ICA in Scotland referred the four parties to the Accountants Joint Disciplinary Scheme (JDS) – the independent regulator financed by the ICA. The executive counsel to the JDS, Chris Dickson, has now laid complaints against them.
The four parties include Deloitte & Touche, since re-named Deloitte, and its partners David John Crawford and Marshall William Miller. Crawford was formerly a partner in Rutherford, Manson, Dowds, a Scottish law firm that did audit work for Semple Cochrane and was taken over by D&T in 1999. John Durie, another former RMD partner, has also had a complaint laid against him.
Dickson said he continued to work on the cases of Semple Cochrane’s internal auditors, and expects to make an announcement “shortly”.
A disciplinary tribunal, appointed by the executive committee of the JDS, will hear the cases of the external auditors. The committee is due to meet in the next few weeks to begin assembling a three-strong tribunal.
Dickson, speaking on behalf of the JDS, told The Scotsman: “We’ve decided there is a case to answer that these people fell below the standards usually expected of a chartered accountant in good standing.”
The most serious penalty the tribunal can impose – if it finds the four parties guilty – is to strike them off. An unlimited fine can also be levied, and they can be reprimanded to various degrees.
Deloitte said in a statement: “We believe the disciplinary action is unmerited and we will be defending the complaints robustly.”
Dickson cited five matters for the tribunal to investigate. They included the audit by D&T of Semple Cochrane’s accounts for the year to 30 June, 1999, when the company recorded a loss of £2.92 million but claimed to have achieved a 38 per cent increase in pre-tax profits to £3.01m.