Independence – Auditors and Internal Investigations

Finally someone makes the right decision…

Deloitte called in to probe McAlpine
Deloitte hired by Alfred McAlpine to conduct a forensic probe into the firm’s accounting issues. The firm is set to conduct an analysis of the FTSE 100 company’s Slate arm after the support services giant uncovered a £13m black-hole this week.

A spokesperson reported that the review was expected to take four to six weeks to conclude. On Monday, McAlpine conceded that its internal audit team had uncovered material accounting irregularities: ‘An investigation found a systematic misrepresentation of production volumes and sales for a number of years by a number of senior managers at the Slate subsidiary.

‘In addition, those involved sought to conceal the financial implications of their actions through the pre-selling of slate at substantially discounted prices. The board believes that the behaviour and collusion of the managers responsible has been entirely deliberate and involves the possibility of fraud.’

McAlpine chiefs have suspended two senior managers at the Slate division. The company said auditors PricewaterhouseCoopers would be staying on in the audit role.

A spokesperson added that the company had agreed with PwC that it would be inappropriate for it to conduct the review.
The company, which has also had to postpone the release of its final results, is bracing itself for additional fallout from the probe after an initial £11m write-down of its 2005 net assets and the £13m reduction in pre-tax profits. The company’s share price plunged by 137p, or 22% to 476p.