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Look at the recent history of FRC enforcement; it seems PwC and KPMG feature quite heavily and the fines against the audit companies and individual employees are significant; in all cases the FRC investigation is of the audit company and their failings and not the companies they have audited.
The FRC are involved because the auditors should have picked up on these glaring issues-they didn’t though KPMG had the balls to resign.
So FRC are investigating KPMG because they were negligent in your opinion.
Sounds like a big fine coming their way,if it was so obvious.
Well, you certainly did suggest otherwise, also please note, I never said anything about directors preparing accounts.
All that rubbish came straight from you.
The investigations will be conducted by the FRC’s enforcement division under the regulator’s audit enforcement procedure.
In August last year Eddie Stobart Logistics suspended trading of its shares on AIM, announced its CEO was to stand down with immediate effect, and delayed publication of its interim results.
The moves followed the discovery of a £2m accounting error by newly appointed CFO Anoop Kang.
In February this year, a new management team released restated half-year results for the period to May 2019 and said ‘profits were significantly impacted by previously communicated accounting-related matters’.
The restated accounts included a £169.2m impairment charge and reported operating losses of £11.6m.
Half year revenues for the six months to 31 May 2019 were £421.3m, compared with £334.5m, restated, in the same period in 2018.
Underlying earnings before interest and taxes was booked as a loss of £11.6m, compared to the restated figure of a £600,000 profit in 2018.
Adjusted loss before tax was £16.5m, compared to the restated 2018 loss of £1.9m in the period and statutory loss before tax was £199.8m (2018 restated: loss of £15.1m).
Adjustments to audited accounts for prior financial periods have also been required, reducing consolidated net assets at 30 November 2018 by £85.1m.
In its update at the time, the haulage company also noted it had made changes to its accounting for property-related activities.
Historically, the group had entered into combined lease and property consultancy transactions with third parties where they provide consultancy services and advice to companies with whom they also enter into long-term lease commitments.
At the conclusion of the consultancy services and the inception of the lease, the group typically receives a large payment.
Under the previously adopted policies, having demonstrated the on-going lease terms were considered to be at or below market value, the group attributed all the consideration received to property consultancy services.
Having reconsidered the accounting guidance, Eddie Stobart Logistics said it noted the difficulty in benchmarking the revenue recognised on consultancy services provided with market transactions for similar services.
Conversely, the guidance for accounting for lease incentives received requires they are amortised over the life of the lease without reference to whether the resulting lease charge (net of incentives) represents a market rate.
Consequently, the group determined that a more appropriate way to account for these combined lease and consultancy services transactions would be to treat all the consideration as a lease incentive and allocate no revenue to consultancy services.
Approximately £17m and £33m derived from those activities for financial year 2017 and financial year 2018 (respectively) and approximately £13m prior to financial year 2017 has been reversed and restated, and the amount related to these activities
Don't make yourself to luck like a complete Muppet.
1 question.
Who are the FRC investigating?
I'm a chartered accountant for nearly 30 years ,
And I've got no idea what the FRC do.
"False factory"
FRC LAUNCHES INVESTIGATIONS INTO KPMG AND PWC OVER THE AUDITS OF EDDIE STOBART LOGISTICS PLC
Go to www.frc.org.uk
Very interesting
What have I missed?
Truth - the FRC investigate audit firms. And no, directors don't prepare the accounts. There is usually an audit committee (with non-exec directors) who co-ordinate production of the accounts in concert with the auditors. Auditors have a duty to ensure the relative integrity of the accounts based on their professional experience/competence. Don't mislead people unnecessarily
TheFRC are investigating KPMG and PwC,, not Eddie Stobart.
They recently slapped a 5million pound fine on KPMG over its audit of Co-Op bank on 1st March.
FRC are holding auditors to account.
Worth googling the current and settled law suits against KPMG and PwC...
Three times the number of sells so surprised the SP held up most the morning. Big sell volumes coming through right now so putting massive pressure on the SP. Can see some people taking profits which is understandable.
Tanking again, cue Truthfactory post momentarily
Wonder if it's to do with ESL ending up with such a large impairment charge.?
Shareprice can keep moving up too.
Also timing just before the AGM??
That’s what I’m thinking ?? could it be a way of correcting it and removing some/all of the debt? Any ideas?
wonder if ESL board felt they were done wrong and asked for FRC to look into the audits,,, ??
Just wondering if this a bad thing for ESL or not? It looks more like something to do with the audit companies.
I'll take a slow 2-3% SP rise a day compared to a massive rise on nothing. Always means the SP will pull back by nearly just as much if not more shortly after.
Truth - i think you may have got this a bit wrong. Kick on Eddie!
Truth, i could not get in on Hz...huge spreads. I could have taken 3.60s last week. Going nicely there for you. i'm waiting for a drop to get in there.
'The Financial Reporting Council (FRC) has commenced two investigations into the audits of Eddie Stobart Logistics plc for the years ended 30 November 2017 (KPMG) and 30 November 2018 (PwC).'