- relevant to F8, P7 students and to some extend P1.
IFAC requires all Accounting professionals to adhere to ethical principles of objectivity, professional due care & competence, confidentiality and integrity when dealing with audit clients. Primary reason is to act as Independent Corporate Governance tool so as to protect shareholders' confidence when they read Auditors' Report.
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| PIC 01: Giant Audit Firm faced Ethical Threats |
When failure to comply this is a serious professional negligence that UK court will not hesitate to punish.
Accountancy giant Deloitte has been fined £14m over
"persistent" failings in its dealings with collapsed car manufacturer MG
Rover.
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| PIC 02 : UK Iconic Car that saw its business collapsed |
Financial watchdog says the global accountancy firm repeatedly failed to spot conflicts of interest during consultations.
The Financial Reporting Council (FRC) ruled both Deloitte and former Deloitte partner Maghsoud Einollahi had displayed a "persistent and deliberate disregard" of accountancy ethics by failing to spot conflicts of interest during consultations in 2005.Einollahi, now retired, was fined £250,000 and banned from practising as an accountant for three years.
Deloitte had been advising a group of former MG Rover directors known as the Phoenix Four during a failed attempt to revive the company, having purchased it for a nominal fee of £10 five years previously.
Both Deloitte and Einollahi had "placed their own interest ahead of that of the public" and "compromised their own sense of objectivity" during consultations, the FRC said.
The West Midlands car maker collapsed into administration in 2005 with debts of £1.4bn and more than 6,000 job losses.
The tribunal in July found against Deloitte on all 13 allegations, including failing to properly consider the public interest.
It said two flawed deals in 2001 and 2002 benefited the Phoenix Four rather than MG Rover, and also earned Deloitte hefty fees.
Deloitte said it was disappointed with the outcome and disagreed with the tribunal's main findings.
It has 28 days to decide whether to appeal.
FRC executive director for conduct, Paul George, said the fines aimed to deter misconduct and "bolster public and market confidence".
A Deloitte spokeswoman said the firm took its public interest obligations seriously.
She said: "We are disappointed that the efforts we and others made did not successfully secure the long-term future of the MG Rover Group."
She added the tribunal did not criticise the quality of its work, but still found against it, and warned this could have negative implications for the advice firms and members can provide.
Final Note: Who says ACCA studies are boring? Look! Real life demonstration and application.
Source: http://news.sky.com/story/1139293/deloitte-fined-14m-over-mg-rover-collapse, 2013
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| PIC 03: The once proud factory that was sold to a new Chinese investor |
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| PIC 04: Rover's Factories were uprooted and transferred to China |
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| PIC 05: Rover's technology sold under the new name - Chinese brand Roewe. Still an excellent car. |
INVITATION TO ALL ACCA Affliates
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| PIC 06: ACCA Collaboration with AGC for Graduation Ceremony |
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| PIC 07 : AGC's Graduation Venue in 2013 |
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| PIC 07: See you there! |
ACCA Graduation Committee (AGC) in collaboration with ACCA (KL) will have a graduation convocation this coming 5th October 2013 at Kuala Lumpur Convention Cente. You may register by visiting http://www.ksacitycampus.com/ .
We celebrate your success!
