London capital and Finance Update
We’ve been keeping a close eye on developments in London Capital & Finance PLC scandal.
Oliver Clive & Co Limited has admitted 10 breaches in relation to their audit of LCF accounts, concerning compliance with ethical standards, audit planning, identifying and assessing risk of material misstatement, the auditing of loan debtors, related parties, bond creditors, opening balances, subsequent events and going concern, and the quality control of the audit – a total of £80,000 in financial sanctions.
PriceWaterHouseCoopers has admitted 8 breaches in relation to identifying and assessing the risk of material misstatement, the exercise of professional scepticism with particular regard to the risk of fraud, and the auditing of loan debtors, prepayments, revenue, financial instrument disclosures, going concern and related party transactions – a total of £7,150,000 in financial sanctions.
Ernst & Young EY has admitted 6 breaches relating to identifying and assessing the risk of material misstatement, the exercise of professional scepticism with particular regard to the risk of fraud, and the auditing of loan debtors, bond creditors, going concern and related parties – a total of £7,075,000 in financial sanctions.
In summing up the Deputy Chief of the Financial Reporting Council said “…these breaches are made considerably more serious by the fact that all of the auditors knew they were auditing an expanding business which was engaged in selling unregulated financial products to retail investors, and that potential investors might place reliance on the clean audit opinions.”
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