Deloitte under investigation for its Go-Ahead audits

The UK government estimates a total of £64million, in addition to the fine, to be recovered from the operator.

Britain’s auditing regulator, the FRC, announced on Tuesday the opening of an inquiry targeting Deloitte firm for its audits of the accounts of British transport group Go-Ahead, whose results had been delayed by the misfortunes of one of its subsidiaries. the FRC”opened an investigation into Deloitte’s audit of Go-Ahead Group’s financial accountsfor the fiscal year ending July 2021 and the previous five fiscal years, the regulator said in a statement, without providing further details.

The group was hit at the beginning of the year by the problems of the railway company London & South Eastern Railway, of which it owns 65%, in addition to the French Kéolis, which owns the remaining 35%. The government had not renewed the subsidiary’s franchise contract in September due to a £25 million debt to British taxpayers. Go-Ahead’s annual results, originally scheduled to be released on January 3, could not be released until February 24, with the company and Deloitte explaining that “more time (was) needed to complete the audit of the financial accountsbecause of this case. The group’s shares were therefore suspended from the London Stock Exchange for almost two months.

More than £25m hidden between 2014 and 2020

London & South Eastern Railway, which serves the British capital and South East England, was also fined £23.5 million by the British government in mid-March. Between October 2014 and March 2020, the company “had deliberately hidden more than £25m in taxpayer moneyBritons, linked to the HS1 high-speed rail line (borrowed in the south east of England by Eurostar), the government had explained.

Go-Ahead Action Suspended After Accounting Problems At Subsidiary

This amount”should have been returned to the taxpayerAccording to the director, who also says he has found shortcomings in a previous franchise agreement. The government estimates a total of £64million, in addition to the fine, to be recovered from the operator. The group acknowledged in September that “mistakes (were) madeand apologized to the Ministry of Transport. Deloitte said Tuesday “cooperate fully in the FRC investigation“, in a statement to AFP. The company added that it is committed to “meet the highest audit quality standards
The UK audit industry is in the crosshairs of the government, who are pointing out that emblematic bankruptcies in recent years have not been forthcoming: those of retail chain BHS (PwC) in 2016, construction company Carillion in 2018 (KPMG) and tour operator Thomas Cook in 2019 (EY).

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