Name rings a bell
Isn't Deloitte organising Covid testing? Oh dear.
Deloitte has been fined £15m by the Financial Reporting Council (FRC) for “serious and serial failures” in its auditing of British software company Autonomy prior to the latter’s acquisition by HP for $11bn. The FRC not only fined the audit company £15m but also penalised senior audit partner Richard Knights half a million …
"Isn't Deloitte organising Covid testing? Oh dear."
They took over from PHE - while they've failed to meet "ambitious" targets, they have certainly outperformed their public sector competition.
The real issue with testing in the UK is the lack of laboratory capacity - something that public or private sector management is unlikely to address as quickly as desired. The joys of a post-industral service economy...
"Delloitte are in charge of providing the lab capacity."
And how many labs do Deloitte have? Zero? And while PHE had labs, they were largely near capacity with existing NHS services.
Which makes this an exercise in either procurring the services of other labs where available or standing up new labs which is slow. Hence this is a case of managing the existing resources and trying to limit political/public demand where possible to match the available resources.
The political element of this is proposed capacity - we may get there eventually if a vaccine doesn't come along and the time taken to increase total UK lab capacity is deemed worthwhile rathert han just fitting testing around existing workload.
The reality is that the UK's current economy (i.e. declining industrial base being replaced by service industries) has put us at a disadvantage for the testing element of COVID-19 as we have relied on other countries to provide that.
They did not ‘take over from PHE’ against expert advice Matt Hancock/BoJo ignored the existing NHS/Public Health Pillar 1 testing people and systems and setup pillar 2 with their outsourcing buddies.
Go look for BBC Newscast with Prof Andrew McNally who helped setup pillar 2/Lighthouse regardless of the advice being ignored.
Pillar 1 was PHE and was not able to scale testing as required in the two months they were given. The example you have given shows 3 X 10,000 tests/day versus the 100,000 that the government was aiming for and that required 5-6 weeks. They are currently handling around 60k/tests per day.
Pillar 2 was private testing (i.e. similar to Germanys test program) and scaled from around 50k/day tests in early may to around 190k tests/day now.
In terms of ministers/bureaucrats saying/not saying things, I would prefer to look at the evidence of what the respective parties achieved.
In my experience, outside auditors have a tremendous conflict of interest. They are paid by the very company they are supposed to audit, and partners are largely evaluated based on keeping the money flowing which means keeping the customer happy. What could possibly go wrong?
Completely agree. The mere fact that Deloitte had been doing the audit for at least the five years that the senior partner had been working with them rings alarms bells.
I get that big firms have complicated structures and that there's a cost in chopping and changing auditors frequently. But it really should be mandatory to change auditors at least every three (?) years, as some small mitigation to avoid auditors becoming entrenched and working for the company - when they should technically be working for the shareholders.
Yes I know shareholders vote to employ the auditors at each AGM but it's pretty unarguable to state that the system isn't working.
Culpable of serious and serial failures...and..."The Tribunal made numerous findings of Misconduct". So now we know that three years of Autonomy accounts, pre-sale, are untrustworthy or to put it another way, it is highly likely that there were "accounting improprieties, misrepresentations and disclosure failures". With the fine reflecting "the gravity and extent of the failings" it will be fascinating to hear the basis for Dr. Lynch vigorously rejecting "all the allegations against him" as he fights the fraud charges.
"Usually Lynch has alot of fans and supporters on these comment pages."
Not sure he has supporters, just those who question who the real villains in the Autonomy acquisition were.
Or is it the case that those that lie about millions are criminals while those that lie about billions are business titans?
It was about the first thing when HP started accusing Autonomy of fraud: if so, why did auditors approve?
Glad they were finally fined, but I note in the response nothing of a mea culpa, more the usual " 'twas so long ago and, we have been doing better since" which everyone recognises for the utter BS it is as it' not exactly the first time.
Personally I think auditor (company) rotation ought to be mandatory, with at least a 2 year gap.
"It was about the first thing when HP started accusing Autonomy of fraud: if so, why did auditors approve?"
It's tough to find old Autonomy audit reports - I believe both the 2009 and 2010 Autonomy audit reports were delayed and losing an audit partner between those was suspicious.
BUT this ignores the fact HP used the services of KPMG to audit Autonomy and find accounting or potential issues with the acquisition of Autonomy and ignored them.
HP paid a significant premium (80%) over the market price for Autonomy, failed to carry out due diligence, didn't appear to justify their reasons for the acquisition and have stumbled upon poor accounting practices to deflect the blame.
Lynch and Hussain may have committed fraud, but the scale of that fraud was tens of millions. HPs board appear to have got away with doing the same with billions of dollars.
Maybe I am misunderstanding what went on but it is likely the Deloitte and KPMG will work in similar ways. KPMG would have has access to what they were given, probably by Deloitte or the accountants that gave information to Deloitte so it is not too far fetched for them to come to the same conclusions.
I am not defending HP but they paid the auditors and given what has been uncovered more recently with the audit standards of the "Big 4" it don't think HP are entirely at fault. Again it is hindsight, everything is clearer now but back then the dodgy accounting and auditing practices had not been exposed. These big audit companies were trusted but ultimately they are just money-making machines for the few at the top.
"KPMG would have has access to what they were given"
KPMG were given very limited access (<2 days?) and come up with a number of substantial issues (in particular, tax liabilities for US acquisitions that would occur if HP purchased Autonomy).
It's unlikely that KPMG had sufficient access to Deloitte audit information to form a view as HP effectively shut them out of the due diligence process and paid KPMGs bills with a "no opinion provided" verdict. Say what you like about auditors but that isn't an audit issue...
Used to be the fifth of the Big Five auditors until its crappy/fraudulent/negligent/criminal auditing of Enron and Worldcom took it down.
Interestingly, when AA collapsed, many of the UK partners and staff went to Deloitte. "Andersen UK to merge with Deloitte & Touche." https://www.theguardian.com/business/2002/apr/10/enron2
You would think they would have some institutional memory of bad press, apparently not. Looks like business as usual.
"Used to be the fifth of the Big Five auditors until its crappy/fraudulent/negligent/criminal auditing of Enron and Worldcom took it down."
The partnership nature of the big accountancy firms combined with differences between accounting rules in different countries makes it difficult to make sweeping generalisations about a particular firm or office as they vary significantly, particularly outside of large financial centres or capital cities.
My understanding is that Enron/Worldcom were effectively brought down by individual divisions in the US rather than wider issues in the business. Tarring the UK Arthur Andersen employees with the same brush maybe slightly unfair.
I struggle to see why it would be the CEO at fault here. He appointed auditors who are recognised as one of the biggest and most reliable. They sign the accounts off. CEO doesn't need to understand all the mechanisms used for accounting, that is why they have a CFO and auditors.
I also don't understand why the auditors and team that carried out the due diligence that HP should have had signed off on the purchase at such an inflated valuation. In fact, I seem to recall that they didn't, rather that HP management rushed through the purchase before due diligence completed. Buyers remorse is a bitch, but it wasn't a criminal act from the CEO. Any trial should really be in the UK as the supposed crime occured here.
I agree with you, but HP needs a scapegoat in America so Lynch will be shipped as the current UK government will only ask "how high?" if the US of A tells them to jump, even though it now means exporting the chap to a country where justice is all but absent.
Yes, I'm a cynic until I've had my beer.
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