Page 7 - Auditors Article

It rapidly became clear to KPMG,

who had been brought in to
handle the preservation of the

company and its administration,

that the misstatement of the

accounts was extensive, involving
very significant manipulation of the balance sheet and profit

and loss accounts. The financial blackhole initially thought on

the 10 October 2018, to be around £40m was in fact more
th
than double at £94m.

Based on these figures Johnson suffered a personal loss of

£180m. However, questions over the speed of the collapse

and the level of misstatement emerged as Grant Thornton’s
chief executive, David Dunckley was questioned by MPs in a

House of Commons committee, the Business, Energy and

Industrial Strategy committee (BEIS). Dunckley claimed that it
was not the auditor’s job to detect fraud. The resultant debate

firmly opposed this view.

Some responsibility however must lie with the company for
not detecting a fraud that could not have happened overnight

but would have been at least a couple of years in the making.

Where was the internal auditing system of corporate
governance?

Financial statement fraud involves the intentional

misstatement or omission of material information from the
organization’s financial reports, essentially by overstating