By Loukia Gyftopoulou
The UK Financial Reporting Council (FRC) has fined Deloitte £3m over its advice to car manufacturer MG Rover, a significant fine reduction for the firm that was facing 13 misconduct counts and a record fine of £14m.
The appeal tribunal sanctions imposed today bring an end to the investigation and overrule the initial tribunal decision from 2013 where the FRC alleged 13 counts of misconduct against Deloitte and its former partner Maghsoud Einollahi.
Einollahi has also received a reduced £175,000 fine (down from £250,000) and has received a severe reprimand instead of a three-year removal from the profession as originally ruled.
Commenting on the ruling, a spokesperson for Deloitte UK said: "Reducing the sanctions imposed by the original tribunal was never a motivation in our appeal. We welcome the decision to overturn the exclusion of our former partner and accept the revised sanctions outlined by the appeal tribunal."Earlier this year the FRC appeal tribunal quoted "a lack of clarity in the ICAEW’s guidance" as a mitigating factor.
The appeal tribunal affirmed the need for accountants to act in the public interest and take this into consideration in deciding whether to accept or continue an engagement but identified a lack of clarity in how accountants should discharge these responsibilities.