Yahoo Finance Watchdog probes Deloitte over audit of building group SIG
Deloitte is being investigated over the work it did for building supplier SIG after accounting irregularities were uncovered earlier this year.
The Financial Reporting Council (FRC) said on Thursday that it has begun a probe into the accounting giant's audit in 2015 and 2016 of SIG, which sells materials to the construction industry.
The FTSE 250 company revealed in February that it had overstated its 2016 profits by up to £3.7m and by as much as £2.5m in the first half of 2017. Investors voted against the appointment of Deloitte as SIG's auditor in May.
The investigation comes at a sensitive time for the big four accountant, which also faces action over the Autonomy accounts scandal as well as a potential lawsuit over an audit of Poundland owner Steinhoff.
A Deloitte spokesman said the company will co-operate fully with the SIG investigation.
"Quality is integral to our audit work and we are committed to continued improvement in audit quality through investments we’ve been making and programmes we have in place," she said.
The FRC said that its investigation will focus on how Deloitte audited SIG's cash and supplier rebates.
Deloitte and its three closest rivals PwC, EY and KPMG have faced intense scrutiny since the collapse of construction giant Carillion, while the FRC itself was accused of being "toothless" and "useless" by MPs.
Earlier this year the Government picked a team of City big hitters to lead an inquiry into the watchdog, which critics accuse of being a soft touch.
The big four are now battling against calls from MPs to be broken up after the companies were accused of “feasting on what was soon to become a carcass” with Carillion.
“We’re not crystal ball gazers,” KPMG’s UK chairman Bill Michael told The Daily Telegraph earlier this year.
