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Mitie Group PLC - Glasgow-based facilities management and professional services - The UK Financial Reporting Council has imposed a financial sanction of GBP1.5 million on accounting firm Deloitte LLP for failings related to its audit of Mitie's results for financial 2016. The FRC also fined John Charlton, the audit engagement partner, GBP40,056. Both financial sanctions were reduced for admissions and early disposal, though both Deloitte and Charlton received a 'severe reprimand'.
The breaches to which they admitted related to the audit of impairment testing of goodwill in Mitie's Healthcare division. Goodwill was the single largest asset in Mitie's balance sheet that year - GBP465.5 million in total - and the Healthcare division accounted to 23% of this. "If the respondents had complied with the relevant requirements, goodwill in the company's Healthcare business might well have been treated as impaired as at the end of FY2016 and deficiencies in the disclosures about Healthcare goodwill would have been detected," the regulator says.
Current stock price: 52.30 pence
12-month change: down 18%
By Tom Waite; thomaslwaite@alliancenews.com
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